GST fraud: 1,377 ‘risky exporters’ who claimed Rs 1,875 crore refunds not traceable in principal place of business

By: |
July 17, 2020 7:38 PM

"As many as 1,377 exporters who have fraudulently claimed IGST refund amounting to Rs 1,875 crore have been found untraceable at their principal place of business," the official said.

As on date, 7,516 exporters are in the ‘risky exporter’ list.

Over 1,300 exporters who had claimed GST tax refunds of Rs 1,875 crore were untraceable at their principal place of business in a massive verification exercise the government initiated after identifying 7,516 ‘risky exporters’, an official said on Friday. “As many as 1,377 exporters who have fraudulently claimed IGST refund amounting to Rs 1,875 crore have been found untraceable at their principal place of business,” the official said, adding this includes seven accredited ‘star exporters’.

As on date, 7,516 exporters are in the ‘risky exporter’ list. Out of them, for 2,830 exporters’ IGST refund /drawback worth Rs 1,363 crore is suspended. The official further said the government has received adverse reports in respect of 2,197 risky exporters and as many as 10 ‘star exporters’ have claimed Integrated Goods and Services Tax (IGST) refunds amounting to Rs 28.9 crore deceitfully.

“The field formations of the Central Board of Indirect Taxes and Customs (CBIC) have detected offence cases amounting to Rs 115 crore against identified risky exporters. Also, out of the 234 suppliers’ verification received so far, 82 suppliers have been found non-existing at their principal place of business,” the official said.

Exporters are identified as ‘risky’ on the basis of specific risk indicators based on customs, GST, income tax and DGFT data. The identified risky exporters’ information is shared with the CGST formations for physical and financial verification.

The supply chain analysis conducted by CBIC’s investigation arm DGARM has found that suppliers have availed ineligible Input Tax Credit (ITC) in 695 cases. Out of these, in 461 cases IGST refund /drawback amounting to Rs 273 crore is under suspension.

Information on these risky suppliers has been shared with jurisdictional field formations for their physical/financial verification and to verify the ineligible ITC availed by them, the official added.

Last year, the CBIC had detected several cases of firms availing credit fraudulently through refund of IGST on export of goods. To mitigate the risk, the CBIC has taken measures to apply stringent risk parameters-based checks, and the consignment of exporters in the risky category are subject to 100 per cent customs examinations and their refunds have been kept in abeyance.

In May, the CBIC had asked the GST risk management wing to conduct supply chain analysis to identify the major suppliers to these exporters and share it with jurisdictional field officers.

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