Disbursement of refund for 'Risky Exporter' Category!

Who is a Risky Exporter?

The procedure for claiming IGST refunds is fully automated as provided under Instruction 15/2017-Cus dated 09.10.2017. Now, there are numerous reasons for which the category of "Exporter's Category', to classified as "Risky".

1. Exporters have availed ITC on the basis of ineligible documents or fraudulently and utilized that credit for payment of IGST on goods exported out of India.
2. It has also been observed in several cases that there is a huge variation between the FOB value declared in the Shipping Bill and the Taxable value declared in GST Return apparently to effect higher IGST pay out leading to encashment of credit.

"How" and "What" Happens after Exporter is classified under the "Risky" Category?

1. DG (Systems) shall work out the suitable criteria to identify risky exporters at the national level and forward the list of said risky exporters to Risk Management Centre for Customs (RMCC) and respective Chief Commissioners of Central Tax.
2. RMCC will put an alert in the system.
3. On the basis of the alert, the "Customs Officer" will examine the Export Consignment of the Exporter.
4. The procedure for disbursement of Refund will be suspended till further notice.
5. Verification by "GST formations", of the premises and all other key aspects to verify the claim of refund
6. On the basis of the same, the GST formation will submit a report.

Action to be taken by customs formations on receipt of verification report from GST formations:

1. Cases where no malpractices have been reported on verification: DG System will remove the alert
2. Cases where malpractice has been reported on verification: The customs officer will not process the refund claim, also the proceedings may be launched for previously claimed refunds.

Now, till now the process mentioned above takes significant time and many honest taxpayers also face the heat of delayed refunds.

Thus, One of the Key Decisions taken by the GST Council in its 47th Meeting with respect to refund processing of 'Risky Exporters'

• In some cases where the exporter is identified as a risky exporter requiring verification by GST officers, or where there is a violation of provisions of the Customs Act, the refund claims in respect of the export of goods are suspended/withheld.
• Amendment in rule 96 of the CGST Rules has been recommended to provide for transmission of such IGST refund claims on the portal in a system-generated FORM GST RFD-01 to the jurisdictional GST authorities for processing.
• This would result in expeditious disposal of such IGST refund claims, after due verification by GST officers, thus benefitting such exporters.

In any case, if the refunds are stuck or any issues are being faced, feel free to contact us at [email protected]/+91 99533 57999