The government on Thursday said the manual intervention introduced in the previously automated system of integrated GST refund to exporters would only apply to 3.5% of exprorters perceived to be ‘risky’ while the remaining exporters would continue to apply and receive timely refunds through the online system.
As FE reported earlier, the Central Board of Indirect Taxes (CBIC) earlier this week instructed its Customs and GST formations to verify the correct availment of input tax credit (ITC) by few exporters who are perceived as “risky” on the basis of pre-defined risk parameters.
Official sources said the government was matching turnover from exports with the income-tax returns filed them to detect discrepancy and foul play. This is being used to flag their consignment to the Customs database for additional checks.
“Only 5,106 risky exporters have been identified so far as against about 1.42 lakh total exporters. Thus the risky exporters are only 3.5% of the total exporters,” the government said in a statement. Further, it said, in the last two days (June 17 and 18) only 1,436 shipping bills filed by total 925 exporters have been intercepted.
“Considering that about 20,000 shipping bills are filed by roughly 9,000 exporters on a daily basis, the intervention is negligible. Even for these risky exporters, the exports are allowed immediately. However, the refund would be released after verification of ITC within a maximum of 30 days,” it said.
There are two ways of claiming taxes paid on exports, one completely online while the other requires manual intervention. In the online system, a firm offsets taxes paid on input from the IGST to be paid on export and then applies online for refund. The entire process of receipt of refund takes about two weeks and less.
With new instructions, the Customs system would now flag certain high risk exports and let them ship commodities only after verification of the consignment to see if it tallies with the description provided in the shipping bill. However, the refund would not be sanctioned by the official posted at a port.
This will be followed by verification of returns by the relevant GST field formation according to a standard operating procedure to be issued by GST policy wing. The formation would then furnish the report to the chief commissioner within 30 days specifying whether the IGST paid and claimed as refund is in valid or not.
The chief commissioner will then compile a report and send it across to the customs official within five days for issuing the refund in case of valid claims. “The new verification exercise is aimed at preventing unscrupulous exporters from defrauding the exchequer and bringing a bad name to the larger exporting community. CBIC would like to assure all genuine exporters that they would continue to get their IGST refunds in a timely manner in a fully automated environment,” the government said.
Published On : 21-06-2019
Source : Financial Express
