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IGST
GST: CBIC extends Sanction for pending IGST Refund Claims on GSTR-1 and GSTR-3B mismatch error

GST: CBIC extends Sanction for pending IGST Refund Claims on GSTR-1 and GSTR-3B mismatch error

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The Central Board of Indirect Taxes and Customs (CBIC) notified the extension of Sanction for pending IGST refund claims where the records have not been transmitted to ICEGATE due to GSTR-1 and GSTR-3B mismatch error.

The Board has received several representations in respect of IGST refunds which are pending due to mis-match of data between GSTR-1 and GSTR-3B.
The resolution to the problem was provided by the Board, as an interim measure, vide Circular No. 12/2018-Cus dated May 29, 2018 read with Circular No. 25/2019-Cus dated August 27, 2019 in respect of Shipping Bills filed upto March 31, 2019.

The CBIC said that the IGST refunds relatable to the Shipping Bills filed after 31.03.2019 having mismatch error between GSTR-1 and GSTR-3B could not be processed.

It was noted that a substantial number of IGST refunds are stuck due to above error as functionality to amend GSTR-3B return is not available so far, there is a need to extend the facility as provided vide above Circular No. 12/2018-Cus dated May 29, 2018 and 25/20199-Cus dated August 27, 2019 in respect of the Shipping Bills filed after March 31, 2019 as well.

The CBIC has decided that the solution provided in the Circular 12/2018-Customs read with Circular No. 25/2019-Customs would be applicable mutatis mutandis for the Shipping Bills filed during the financial year 2019-20 and 2020-21 i.e. in respect of all Shipping Bills filed/ to be filed upto March 31, 2021.

The CBIC stated that the corresponding CA certificate evidencing that there is no discrepancy between the IGST amount refunded on exports in terms of this Circular and the actual IGST amount paid on exports of goods for the period April 2019 to March 2020 and April 2020 to March 2021 shall be furnished by 31st March, 2021 and 30th October 2021, respectively.

“The concerned Customs Zones shall provide the list of GSTINs, who have availed benefit under Para 3A & 3B of said circular and yet have not submitted the CA certificate to the Board by the 15th April 2021 for the IGST refunds relatable to financial year 2019-20 and by 15th November, 2021 for financial year 2020-21,” the CBIC said.

Source: Taxscan.

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GST Refund
Govt blocks fraudulent GST refund claims worth Rs 1,875 crore

Govt blocks fraudulent GST refund claims worth Rs 1,875 crore

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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.

Source: Hindustan-Times.

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GST Refund
CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days

CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days

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The Central Board of Indirect Taxes (CBIC) has cleared over Rs 10,700 crore worth refunds in GST and customs duty between April 8-23.

In the ‘Special Refund and Drawback Disposal Drive’, the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore.

Over 1.86 lakh customs and duty drawback refund was processed totalling Rs 915.56 crore, the CBIC said in a tweet.

“CBIC is committed to help GST Taxpayers/Exim Trade during #COVID19. Expeditious sanction of refunds during Special Refund Drive provide relief to trade, especially MSMEs,” it said.

The Finance Ministry had on April 8 said that to provide relief during COVID-19, it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including MSME.

The total refund granted will be approximately Rs 18,000 crore, it had said.

The CBIC had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and customs refunds and instead use official email for all communication.

The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to taxpayers in these difficult times even though the GST Law provides 15 days for issuing acknowledgement or deficiency memo and total 60 days for disposing off refund claims without any liability to pay interest.

Source: Economic-Times

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GST Refund
GST fraud: 1,200 exporters seeking Rs 350 crore GST refund untraceable

GST fraud: 1,200 exporters seeking Rs 350 crore GST refund untraceable

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Even after two years of implementation of the Goods and Services Tax (GST), the government is struggling to plug leakages in the system. A probe by the GST authorities has revealed that nearly 1,200 exporters, who made GST refund claims of Rs 350 crore, were untraceable, the Times of India reported. 

Citing sources, the daily said that over 800 entities have been prevented from exporting overvalued merchandise of Rs 1,500 crore to claim fake IGST with refunds over the last five months.

GST authorities also suspect the involvement of few custom brokers in these frauds, involving fictitious entities, existing only in virtual space, through identity thefts with fake and morphed documents. The role of 50-odd brokers is under the scanner as they were found to have dealt with exporters who are now untraceable. As part of the licensing conditions, the Central Board of Indirect Taxes and Customs (CBIC) has allowed these brokers to independently verify the KYC of exporters, the publication mentioned.

Initial scrutiny of the Integrated GST claims had revealed that eight star trading houses, which are entitled to several benefits, were also not traceable, prompting the revenue department to keep close tabs on these entities. Tax officials said that the entire exercise has been undertaken through the analysis of data, which is also shared with other government agencies including CBDT.

The publication citing sources said, newer modus operandi are now surfacing. An investigation related to a Delhi-based company revealed fraudulent refund claim of close to Rs 10 crore. The firm was ostensibly exporting readymade garments to a special economic zone. The taxpayer was selected for physical scrutiny and found non-existent at his declared address. It was also found that the owners of the firm were dummy persons.

Using a web of fake invoicing of over Rs 847 crore, the company is accused of creating a fraudulent tax credit of Rs 195 crore. Investigations showed that even the suppliers were untraceable. The documents showing deemed exports to the SEZ were also found to be fake.

Source: Times-now-news

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analytics
931 GST fraud cases identified through Data Analytics

931 GST fraud cases identified through Data Analytics

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Department of Revenue through data analysis has identified 931 cases of fraudulent GST.The maximum numbers of such cases for Input Tax Credit frauds have been booked in Kolkata zone followed by Delhi, Jaipur and Punchkula (Haryana).

Refunds of over Rs. 28,000 crore are said to have been filed by over 27,000 taxpayers so far on account of inverted duty structure in the current year. Finance Ministry sources confirmed that such identified taxpayers who have purchased goods from tax evading non-filers would face verification and scrutiny as necessary.

This is being weekly reviewed and monitored by the Union Revenue Secretary, Dr Ajay Bhushan Pandey.

GST formations have booked 6641 cases involving 7164 entities till November last year and have so far recovered around Rs.1057 crore.

Sources added that investigators in Delhi have busted through data analytics a significant fraud case, where fraudsters created a network of over 500 entities comprising of fake billers, intermediary dealers, distributors and bogus manufacturers of hawai chappals for availing and encashing fake ITC credits. The bogus “manufacturers” created in Uttarakhand were making supplies to other fictitious entities & retailers in Gujarat, Maharashtra and Tamil Nadu. The raw materials for the chappals, known as EVA compound, are chargeable to 18% duty whereas chappals are chargeable to GST of 5%. As a result, the law allows the manufacturers to claim refunds of the inverted duty structure in cash.

Another important case was that of IGST fraud from Surat in which preliminary investigations revealed that 19 firms fraudulently claimed ITC to the tune of 55 crore against the fake invoices received by these firms valued at Rs. 679 crore. In this case during the search at the premises of two kingpin firms M/s Satyam Impex and M/s Aatif Fashion, it was revealed that 17 other firms were registered with GST by misusing the identity/documents of daily wagers, casual workers, etc.

Data Analytics wing of GST has been able to identify all such cases involve fake invoicing and fraudulent tax credits, which have been encashed through the facility of IGST refunds.

Source: India-Today.

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gst audit
Govt to reopen FY17-18 GST accounts for fresh audit to check tax evasion, fake refund claims

Govt to reopen FY17-18 GST accounts for fresh audit to check tax evasion, fake refund claims

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In a major enforcement drive, the government has ordered a fresh audit of FY17-18 GST accounts to check tax evasion, fake refund claims and credits. The government has started issuing Goods and Services Tax (GST) audit notices to taxpayers for financial year 2017-18, nearly three years since the launch of the indirect tax regime.

As per the tax notice issued by the taxman, the agency has invoked section 65 of the Central Goods and Services Tax (CGST) Act for an audit of accounts and records from July-March of 2017-18 or from the date of the last audit to FY18, CNBC-TV18 reported. The taxpayers have been asked to come with detailed records of related documents, with an immediate appearance in person with the taxman, as per the report.

As per the notices, the list of documents include GST forms, income tax papers, input service invoices, electronic cash/credit ledger, business agreements of sales and purchase, and other related documents.

The fresh audit will happen across the country during January and February 2020. Following this, the taxman will submit a report to the centre, including the list of tax evaders and fake refund claimants.

Earlier on Tuesday, a national level GST Conference was held in Delhi, where the Centre and States had joined hands to take necessary action to streamline the Goods and Services Tax system and plug revenue leakage. These measures include curbing fraudulent refund claims, linking foreign exchange remittances with IGST refund, investigation of fraudulent ITC cases by the IT department, a single bank account for foreign remittance receipt, and refund disbursement, among others.

Source: Business-Today

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GST Evasion
Raids unearth Rs 470 crore fraudulent GST claims

Raids unearth Rs 470 crore fraudulent GST claims

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In a massive nationwide search operation carried out on exporters and their suppliers covering 336 locations on Wednesday, nearly 1,200 officers from the Directorate of Revenue Intelligence and Directorate General of GST Intelligence unearthed fraudulent claims of over Rs 470 crore of Integrated Goods and Services Tax (IGST) and seized fake invoices of Rs 3,500 crore.

The searches showed that some exporters were exporting goods on payment of IGST, using credit for taxes paid on inputs. While there is no harm in using input tax credit (ITC) to settle your tax liability, data analytics and intelligence gathered by the authorities showed that the credits were based on fake supplies. The IGST payments on exports are claimed back as refunds.

The agencies are investigating IGST refunds of around Rs 450 crore.

After detailed analysis of the data provided by the Directorate General of Analytics and Risk Management (DGARM), it was also noticed that there was no or negligible payment of tax through cash by the exporters as well as their suppliers.

Major crackdown: Raids against GST violators held across 15 states

In a few cases, even the tax paid through ITC was more than the ITC availed by these firms. This resulted in one of the biggest search operations across 15 states including Delhi, Haryana, UP, Gujarat, Maharashtra, Tamil Nadu, West Bengal, Karnataka, MP, Telangana, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand and Chhattisgarh.

Over the last few months, the government has gone after entities which have made bogus sales or export claims and use of data, which involved matching the GST and income tax returns, has thrown up several cases where the entities involved were sham companies.

“Some live export consignments of these exporters have been intercepted at Vadodara Rail Container Terminal, Mundra port and Nhava Sheva port for examination in order to ascertain mis-declaration,” DRI said in a statement.

Source: Times-of-India.

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igst refund fraud
Two traders arrested for Rs 50 crore IGST refund fraud 

Two traders arrested for Rs 50 crore IGST refund fraud 

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The Belapur Central GST Commissionerate arrested two traders for allegedly floating over 50 shell companies to fraudulently to avail IGST refunds after GST council recently issued guidelines to curb refund related frauds, people in the know told ET.

Sources said Ajay Gopinath Mishra and Ramesh Chandra Bhatt availed IGST refund by showing export of textile goods over Rs 350 crore and collected IGST refund of over Rs 50 crore between January and May. The said amount was refunded by the customs to these exporters at the port of export.

“The IGST was paid using input tax credit (ITC) which has been found to be fraudulent,” said one of the officials.

An official explained that non-existent suppliers issued invoices for passing of the ITC utilised for payment of IGST on exported goods and IGST refund is claimed. These companies were created by using the PAN and Aadhar Cards of various un-suspecting persons through whom GST refunds were being claimed.

“In this case too, the Belapur Commissionerate officials unearthed a syndicate of more than 50 companies such as H.A. Creation, A.S. Fashion, Ritiesh Creations, R.D. Creation, Bamane Enterprises were floated to fraudulently avail benefits of IGST refunds,” revealed the official. “No one has actually paid the IGST on which ITC was availed by the exporter.”

During investigation, a source said, the bank accounts declared to the department at the time of obtaining GST registration certificate were allegedly different from the bank account declared to the Customs authorities for the purpose of IGST refund. The probe also revealed that while most of the suppliers and CHAs are located at Delhi, the premises of dummy exporters are registered in Mumbai.

Furthermore, documents such as purchase documents, export documents, cheque books, signed blank cheques, ATM debit cards and PIN of about 50 proprietorship firms were recovered from the office premises of the mastermind.

“Both the persons in their statement have admitted that they were the custodian of the bank documents of all the proprietorship firms,” the official further added.

“The investigations has revealed that fictitious suppliers issued invoices for passing of the ITC which was utilized for payment of IGST on exported goods and claiming IGST refund of the same. This fact was further corroborated by the findings that none of the suppliers down the line have generated mandatory E-way Bills for the purported supplies made to the exporters. Thus entire ITC availed by the exporters was found fraudulent,” said Shrawan Kumar, Commissioner, CGST.

Earlier in June the Central Board of Indirect Taxes and Customs (CBIC) asked director-general (systems) to identify a list of “risky exporters” and share it with customs and GST officers. Thereafter CBIC issued a circular dated June 17, 2019 providing a time bound mechanism to verify the IGST payments for goods exported out before sanctioning IGST refund in suspicious and risky cases.

“The new mechanism would ensure that such frauds are curbed while facilitating genuine exporters,” added Kumar.

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Source: Economic-Times.