CBICは、納税を伴う輸出に対するIGST還付の検証に向けた追加の保護措置を導入しました。

In order to make India’s exports competitive in the global markets and in line with the principles of international trade and commerce of zero-rating exports, the GST and customs laws have provisions on place for grant of refunds in case of input taxes paid on exported goods. 

On similar lines, the GST law also has an alternative route to benefit the exporters – ‘export of goods with payment of taxes’, wherein the taxes paid on sale would be refunded.

In line with this initiative, the Central Board of Indirect Taxes and Customs (‘CBIC’) has brought in several exporter friendly and self-assessment procedures by way of complete automation of the procedure for claiming IGST refunds (Instruction No. 15/2017 - Cus dated 9 October 2017).

However, the CBIC has noticed instances of fraudulent ITC claims using ineligible documents and subsequent utilisation of the credit for the purpose of payment of IGST exports. 

In addition, there were substantial variations between the FOB value declared in the Shipping Bill and the Taxable Value declared in the GST returns, with the intent of higher IGST payment using utilisation of available credit.

In order to curb these practices, the CBIC has issued Circular No. 16/2019-Customs dated 17 June 2019 introducing additional verification of issue of IGST refunds on export of goods with payment of taxes.

The CBIC seeks to establish a mechanism for identification of suspicious cases, which alerts the customs officers to examine the goods. Thereafter, all IGST refunds pertaining to the export shipment would be issued only upon verification by the GST field formations and after following the existing procedure for claim of IGST refunds on export of goods. 

The summary of the Circular is given below:

In addition to the existent procedure for claiming IGST refunds (Instruction No. 15/2017 - C us dated 9 October 2017), the CBIC has prescribed the following:

1. 疑わしいケースの特定：GST当局は、リスクの高い輸出業者を（国レベルで）特定するための適切な基準を定義し、それを税関リスク管理センター（RMCC）および各CGST首席委員に共有します。GST当局は、過去に付与されたIGST還付の詳細やその他の関連情報を随時提供します。
2. アラートの生成：RMCCは税関職員に警告を発し、すべての輸出貨物に対する義務的かつ完全な検査を指示します。
3. 輸出貨物の検査：税関職員はRMCCのアラートに従って貨物を検査し、不一致が認められない場合は通常の通関手続きに基づいて許可を出します。
4. IGST還付の停止：輸出貨物の関連船積書類に関するIGST還付請求は、GST当局からの報告書を受領するまで保留されます。
5. GST部門による検証：GST当局は、GST政策部門が発行する標準作業手順書（SOP）に従ってIGST還付請求およびその他の関連事項を検証し、30日以内にIGST首席委員に報告します。
6. RCMCへの報告：IGST首席委員は、GST当局から報告を受領後5営業日以内に、全ケースの報告書を取りまとめ、RMCCおよび関係する輸出港の税関に送付します。
7. 今後の対応：
   1. 検証の結果、不正がなかった場合：輸出港の税関職員は、発行される助言に従い、GST当局が検証した範囲内でIGST還付を処理します。
   1. 検証の結果、不正が報告された場合：還付請求は処理されません。

The Circular goes a long way in brining transparency in the process as well as keeping a check on the fraudulent practices by exporters to claim IGST refund at the cost of genuine taxpayers who have been relentlessly following up with the GST authorities time and again for the grant of IGST refunds.

Read more on Clarification on GST Refund related issues