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In a bid to minimize tax fraud using bogus invoices, the CBIC introduces ‘Manual Check’ for its customs and GST formation before the issuance of IGST refunds. However the notion was perceived as a setback to the automated refund process by many creating a misleading impression that genuine exporters would suffer on account of the newly introduced verification process.

To clear the air on the same, CBIC released a press note, stating that the newly introduced system shall only target the risky exporters.

DBC Chartered Accountant   presumes ‘Risky’ on the basis of pre-defined parameters. The exporters who are indulged in large scale frauds relating to the IGST refunds .These exporters account for only 3.5 per cent of the total number of exporters. The customs and GST formations have to verify the correct availment of ITC by a few exporters.

On a daily basis among the 9000 exporters filing 20,000 Shipping Bill among which 1436 Shipping Bill filed by 925 exporters were interdicted with a negligible amount.

Risk Management Centre for Customs (RMCC) shall insert alerts for all such risky exporters and make 100 per cent examination mandatory of export consignments relating to those risky exporters. Also, alert shall be placed to suspend IGST refunds in such cases.

As per the instructions, the GST officers have been mandated to report to the Chief Commissioner of Central Tax within 30 days specifying whether the amount of IGST paid and sanctioned as refund was in accordance with law.

The Chief Commissioner of Central Tax will then report with custom port within 5 working days.

The GST Head at D. Batra & Company says,” The inception of manual checks in IGST Refunds is a good way to prevent unscrupulous exporters from defrauding the exchequer.”

“For a pragmatic selection of exporters whose claims are to be audited, this measure should be quite a justified one,” concludes D. Batra & Company.