The government has blocked fraudulent Goods and Services Tax (GST) refund claims worth Rs 1,875 crore involving 1,377 exporters after their addresses could not be traced, a Union finance ministry official said.
“This number of risky exporters, also, includes seven exporters accredited as star exporters,” the official said requesting anonymity.
The government rates export houses on the basis of their performance and accord them one to five stars.
The Central Board of Indirect Taxes and Customs (CBIC) has instructed its officials to verify the correct refund of input tax credit (ITC) by such risky exporters on the basis of pre-defined risk parameters, he added.
According to the official, while CBIC is focusing on quick disbursal of pending refunds to exporters, it also uses data analytics to identify “risky” exporter entities that take input tax credit fraudulently and monetise it by paying Integrated Goods and Services Tax (IGST) and claiming a refund on that.
Imports of goods and services are treated as inter-state supplies and attract IGST.
“The verification exercise is aimed at preventing unscrupulous exporters from defrauding the state exchequer and bringing a bad name to the exporting community at large,” he said.
CBIC has, however, assured all genuine exporters that they would continue to get their refunds in a timely manner in a fully automated environment, he said.
The official said a total of 7,516 exporters figure in the risky exporters’ list to date. “IGST refund worth Rs 1,363 crore is suspended in respect of 2,830 risky exporters. Adverse reports have been received in respect of 2,197 risky exporters,” he added.
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