Investigations found nine star exporters in sectors such as agro-processing, garments and electronics were not traceable at the addresses on record, while in two cases, the premises were found sealed and seized by banks as the exporters had been declared as NPAs, even as they availed IGST refunds.

The Central Board of Indirect Taxes and Customs (CBIC) has asked Director General of Foreign Trade (DGFT) to beef up its system used for accrediting exporters after investigations brought to the fore integrated goods and services tax (IGST) fraud by some ‘star’ status holding exporters.

Star exporters, which are given more leeway than others including reduced customs inspections, may now be asked to produce statutory records of compliance, including certifications declaring no non-performing assets (NPA) from the banks as CBIC cracks down on fake invoicing and fraudulent tax crediting, being encashed through IGST and input tax credit refunds.

Investigations found nine star exporters in sectors such as agro processing, garments and electronics were not traceable at the addresses on record, while in two cases, the premises were found sealed and seized by banks as the exporters had been declared as NPAs, even as they availed IGST refunds.

Further, 40 of 241 star exporters surveyed had declared their turnover between nil and Rs 1 crore in 2017-18 and 2018-19, when it should have been at least Rs 21.5 crore for three consecutive years.

“These instances emphasize the need to make the system of accrediting exporters more robust,” the CBIC said in an office memo to the DGFT, seen by ET.

Published On : 06-01-2020

Source : Economic Times