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Last Updated : Jan 06, 2020 05:57 PM IST | Source: PTI

GST fraud | CBIC asks DGFT to tighten process after star exporter pays Rs 1,650 tax seeks Rs 3.9cr refund

In its drive to check fraudulent availment of IGST refunds, the CBIC has extensively used data analytics and matched data with income tax, GST and customs to identify risky exporters.

The Central Board of Indirect Taxes and Customs (CBIC) has asked the Directorate General of Foreign Trade to make the accreditation system for star exporters more robust to curb tax fraud.

"Since an exporter enjoying 'star' status is allowed many facilities, including reduced customs inspections, it makes for a strong case for DGFT to continuously (or annually) seek a compliance and verification report from other regulators or obligate the exporters to produce statutory records of compliance, including certifications from the banks of No NPAs," the CBIC said in a letter to the DGFT earlier this month.

The move comes following investigations into the mis-availment of IGST refunds by certain exporters holding 'star' status.

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In its drive to check fraudulent availment of IGST refunds, the CBIC has extensively used data analytics and matched data with income tax, GST and customs to identify risky exporters.

"Ongoing investigations have thrown up at least 9 star export houses as 'non-traceable' at their premises declared on record. All these star export houses have availed IGST refund, which is now being questioned by the tax officers," sources said.

There are instances where an exporter with over Rs 50 crore of exports of readymade garments has taken refund of Rs 3.90 crore while the entity's total GST payment in cash was a merely Rs 1,650.

Investigators are of the view that all such cases involve fake invoicing and fraudulent tax credits, which have been encashed through the facility of IGST refunds, sources said.

The present ongoing exercise by CGST field formations has revealed serious issues in compliance behaviour in some cases.

Besides, sources said, nine star exporters were not traceable at the addresses on record.

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First Published on Jan 6, 2020 10:20 am
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