As many as 1,377 exporters who have fraudulently claimed Integrated GST (IGST) refund amounting to Rs 1,875 crore have been found untraceable at their principle place of business. These include seven exporters accredited as star exporters. There are three more star exporters against whom adverse reports have been received. According to Finance Ministry sources, these 10 star exporters have claimed IGST refund amounting to Rs 28.9 crore deceitfully.
As of now 7,516 exporters are in risky exporter list. The tax department has so far suspended IGST refund/drawback worth Rs 1,363 crore related to 2,830 risky exporters. Adverse reports have been received in respect of 2,197 risky exporters.
Exporters are identified as risky on the basis of specific risk indicators based on Customs, GST, Income Tax and Director General of Foreign Trade (DGFT) data. The details of identified risky exporters are shared with the CGST department for physical and financial verification. Star exporters are those who receive several facilities including reduced customs check.
According to the sources, the field formations of Central Board of Indirect taxes and Customs (CBIC) have detected fraudulent cases amounting to Rs 115 crore against identified risky exporters.
The board has also detected that 82 suppliers, out of the 234 verified so far, have been found non-existing at their principle place of business. The tax department has also found 695 cases where suppliers of the exporters have availed input credit for which they were not eligible. Out of the 695 cases, in 461 cases IGST refund /drawback amounting to Rs 273 crore is under suspension.
Under the GST law, exports are zero-rated supplies. However, all exports are subject to IGST, which can later be reclaimed through refunds against the tax paid.