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Last Updated : Jun 19, 2019 03:20 PM IST | Source:

IGST refund applications to be verified for approval to identify fake claims

IGST refunds are automatically issued to exporters, based on shipping bills filed with customs and goods and services tax returns filed with central tax authorities.

Kamalika Ghosh @GhoshKamalika
Representative image: Pexels
Representative image: Pexels

Customs and Goods and Services Tax (GST) officers will have to now verify Integrated Goods and Services Tax (IGST) refund claims before sanctioning them, a senior government official told Moneycontrol.

"The Central Board of Indirect Taxes and Customs (CBIC) has asked officers to closely verify the IGST refund claims before sanctioning them. 'Risky exporters' will also have to be identified by director-general (systems) and their details will be shared with customs and GST officers, so that an alert can be generated to verify their export consignments," the official said.

IGST refunds are automatically issued to exporters, based on shipping bills filed with customs and goods and services tax returns filed with central tax authorities. The refunds are issued within a fortnight of filing of returns without any manual intervention.


In a letter to field offices, the CBIC said it had observed instances of availing of IGST refund using fraudulent input tax credit (ITC) claims by some exporters.

"It has been decided to verify the IGST payments through the respective GST field formations," the officer said.

The GST policy wing will devise a standard operating procedure for GST officers to verify the IGST refund claims, according to the officer.

The GST officers will report to the chief commissioner of central tax in 30 days, specifying whether the amount of IGST paid and claimed or sanctioned as refund was in accordance with the law or not.

The chief commissioner of central tax will then share the report with customs port within five working days.

In cases where no malpractices were detected and the ITC availed by the exporter was in accordance with the GST law, the customs officer at the port of export shall proceed to process the IGST refund.

For cases where malpractices have been reported on verification and it has been found that the exporter has availed ITC fraudulently or on the basis of ineligible documents and utilised the said ITC for payment of IGST claimed as refund, the customs officer will not process the refund claim, the CBIC said.

The CBIC said DG (systems) will work out the suitable criteria to identify risky exporters at the national level and forward the list of said risky exporters to the Risk Management Centre for Customs and respective chief commissioners of central tax.

Under GST, every person making a claim of refund on account of “zero-rated” supplies has two options. Either he can export without payment of integrated tax under bond or letter of undertaking and claim a refund of accumulated ITC or he may export on payment of integrated tax and claim refund thereof.

Currently, the facility of automatic refund is available only for those exporters who have paid IGST while exporting goods. Since the GST Network (GSTN) systems are integrated with customs. Hence, refunds are generally transferred to the bank accounts of such exporters within a fortnight.

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First Published on Jun 19, 2019 03:20 pm

tags #GST #IGST #Tax

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