A joint operation by the Directorate General of GST Intelligence (DGGI) and the Directorate General of Revenue Intelligence (DRI) carried out on pan-India basis covered 336 locations on September 11 against exporters fraudulently claiming refund of IGST.
This was the biggest-ever joint operation involving 1200 officials by the two premier intelligence agencies of the Central Board of Indirect Taxes and Customs (CBIC).
The operation covered entities in the 13 states including Delhi, Haryana, Uttar Pradesh, Gujarat, Maharashtra, Tamil Nadu, West Bengal, Karnataka, Madhya Pradesh, Telangana, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand, and Chhattisgarh.
An order was made by the CBIC demanding director-general (systems) to identify the list of “risky exporters” and share it with customs and GST officers so that an alert can be generated for 100 percent examination of their export consignments.
Based on the data provided by the Directorate General of Analytics and Risk Management (DGARM), an analysis was conducted wherein certain ‘red flag’ indicator filters were applied to Customs’ export data in conjunction with the corresponding GST data of the exporters.
The search was carried on the premises of exporters and their suppliers on Wednesday morning and continued till Thursday morning, this long day operation revealed that many of the exporters and their suppliers were either non-existent or had provided fictitious addresses.
Following a huge search operation, it was found that some exporters were exporting goods on payment of tax (IGST) out of the Input Tax Credit (ITC) availed on the basis of ineligible/fake supplies and later on such IGST payment was claimed as refund on export.
Preliminary examination of the records and documents revealed that an Input Tax Credit of more than Rs 470 crore (invoice value of around Rs 3,500 crore) was bogus and this ITC was further utilised by the exporters and claiming cash refund on the same.
The official said, “an IGST refund amount of around Rs 450 crore is under examination.”
Besides that, the DRI-DGGI teams are also carrying out a scrutiny of ongoing export consignments of these exporters. These consignments were intercepted at Vadodara Rail Container Terminal, Mundra port and Nhava Sheva port for examination in order to ascertain misdeclaration.
Further investigations in the matter are under progress.
