Standard Operating Procedure in case of alerts in IGST Refund

Standard Operating Procedure

On 23rd January 2020, the Central Board of Indirect Taxes and Customs (CBIC) has published Circular No.131/1/2020-GST regarding the Standard Operating Procedure (SOP). This new procedure is for those exporters whose refund has been stuck due to alerts in IGST refund at custom.

In June 2018, the CBIC has noticed instances of fraudulent ITC claims using ineligible documents and subsequent utilization 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 the utilisation of available credit.

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.

CBIC has identified more than 5000 exporters under the same categories. They have set alerts on IGST Refund of those fraudulent claims.

In most of the cases, the CBIC has detected that ineligible IGST refund claims were from the past few months. At the time of verification, they could not find, the existence of such exporters. Moreover, in most of these cases, the Input Tax Credit (ITC) claims were on the verge of fake invoices.

Standard Operating Procedure to Fasten the verification process

CBIC has prescribed the following procedure,

  • CBIC has taken some measures and decided to run a strict parameter-based rigorous checking process. They have decided to use different data analytics and AI tools under the Standard Operating Procedure. When doubtful exporters found, they will take them up for further verification. Until the scrutinized field report of concerned cases come up, CBIC will keep the refund procedure of those exporters in abeyance. In addition to that, certain cases are subject to a 100% examination at the customs port.
  • CBIC has taken some essential measures so that genuine exporters don’t face any kind of hassle. The jurisdictional CGST or Customs will inform the exporters whose scrolls are kept in halt. If any exporter wants to accelerate the whole process, the person needs to fill in Annexure ‘A’ form. They have to submit the form to the jurisdictional CGST authorities for verification within the given deadline.
  • Jurisdiction CGST office must take 14 days maximum to complete the verification process, once the exporter provides all the information . If the verification does not complete within this period, the jurisdiction CGST officer will inform it through a notice as a part of the Standard Operating Procedure to the nodal cell of the Chief Commissioner Office.
  • The exporter can also escalate the matter to the Chief Commissioner/ Jurisdictional Pr. Chief Commissioner of Central Tax if the verification process gets delayed for more than 14 working days. The exporter should send an email to the IDs of jurisdictional Chief Commissioners [provided in Annexure B], explaining all in detail.
  • After that, the jurisdictional Chief Commissioner/ Pr. Chief Commissioner must take the required action. They have to complete the pending verification process within the next 7 working days.

EndNote

If any kind of claimed refund remains pending for more than a month, the exporter must register at www.cbic.gov.in/issue and draft his/her grievances. Relevant details like IEC, GSTIN, Port of Export, Shipping Bill No., and CGST form filled in provided format, are mandatory to submit. Next, the Head of the GST or CBIC Committee will examine the issue to find a real-time resolution.

Read More: CBIC introduces additional safeguards for verification of IGST refunds

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Related Post
NRI as per FEMA

Residential status as per FEMA | NRI as per FEMA

Applicability of provisions of FEMA are based on the residential status of a person, i.e., a person resident of India has more liberty under FEMA as compared to a NRI as per FEMA or person resident outside India. Therefore, to check the extent of applicability of FEMA provisions, it is important to first check the residential status as per FEMA for a person.

Read More »
How to check the FSSAI license number online?

How to check the FSSAI license number online?

FSSAI license number is a 14 digit FSSAI number issued to every food business operator irrespective of the scale and size of the business Operation. There are different kinds of FSSAI licenses depending upon the business and its operation size.

Read More »
FSSAI Renewal

FSSAI Renewal | Guide & Procedure

FSSAI renewal is as important as getting a first time license for operating a food business. The FSSAI license should be renewed within the stipulated time. Normally the initial FSSAI license is issued for one to five years. Every food business operator should renew the FSSAI license thirty days before the expiry of the current license.

Read More »



Want to talk to us

Leave your Name, email, Phone number along with what you are looking for in message box or you can call us at 011-41715118

V J M & Associates LLP

Contact Us

Not found what you are looking for

Write us for Article request, Feature request or any specific query

Great! Sharing is good

Share on facebook
Share on linkedin
Share on twitter
X