Central Board of Indirect Taxes and Customs (CBIC) on Monday said that the exporters have already been paid Integrated GST (IGST) refund of over Rs 1.12 lakh crore, which is likely to benefit over 83,500 exporters.
"This shows that the government's efforts to fast track refunds under goods and services tax (GST) especially to exporters are yielding results," CBIC said in a press release.
As of now, refunds of only Rs 3,604 crore are pending with CBIC and out of about 185,000 exporters, a total of 6,421 exporters (about 3.4 per cent only) including some 'star exporters' have been identified as risky and hence, red flagged, it said.
"Even some of the 'star exporters' are not traceable at the addresses given by them," it added.
IGST refunds are paid to exporters automatically based on shipping bills filed with customs and GST returns filed with central tax authorities. The refunds are issued within a fortnight of the filing of returns without any manual intervention. But, move to verify refund claims have delayed the process of refund issuances to exporters.
CBIC said that while it is focusing on quick disbursal of pending refunds to exporters, it has to use data analytics to identify 'risky' exporter entities that take the input tax credit (ITC) fraudulently and monetise it by paying IGST and taking refund thereof or taking a refund of the accumulated ITC.
"These exporters are being subjected to 'Know Your Customer' (KYC) and verification process before the grant of refund," CBIC said.
The agency noted that the verifications so far have revealed that 1,241 exporters are not traceable at their given addresses, which include eight 'star exporters'. In addition, adverse verification reports have been received in the case of 399 exporters, which also include four 'star exporters'.
CBIC said that since the advent of GST, 77 per cent of India's exports have been under Letter of Undertaking (LUT), which are unaffected by the verification exercise being done by the CBIC officials. Moreover, even in respect of the exporters identified as risky, the government is taking all necessary steps to expedite the verification.
Under GST, there are two options of claiming taxes paid on exports. Either a firm can export without payment of integrated tax and claim a refund of accumulated ITC, or it may export on payment of integrated tax and claim refund thereof.
By Chitranjan Kumar