FinMin to relax 100% physical examination requirement for ‘risky exporters’


The Finance Ministry has decided to gradually relax the requirement of 100 per cent physical examination of export consignments of “risky exporters” in case no discrepancies were detected on previous inspections.

In order to check GST evasion, the Central Board of Indirect Taxes and Customs (CBIC) had last month identified 5,106 “risky exporters” who claimed GST refunds based on bogus invoices.

It was decided that Risk Management Centre for Customs (RMCC) will insert alerts for all such risky exporters and make 100 per cent examination mandatory of their export consignments.


The CBIC said it has received representations from exporters and organisations saying that their cargo is getting delayed and they have to incur additional costs for carrying out re-packing.

In a circular issued to field formations, the CBIC said that only a miniscule percentage of export consignments are being selected for examination on account of risk associated with fraudulent availment of IGST refunds.

“However, keeping in view the issues raised by trade, Board has decided that the requirement of 100 per cent physical examination of each export consignment shall be gradually relaxed provided no irregularity was noticed in earlier examinations of export consignments of export entities,” the CBIC said.

In order to bring down the level of examination, the CBIC has decided that RMCC will take into consideration the feedback received from field formations with regard to the 100 per cent examination conducted on exports of risk based identified entities.

Further, wherever the examination has validated the declaration made in the shipping bill, “RMCC may review the risk assessment and gradually taper down the percentage of physical examination,” it added.

As per official estimates, fraudulent claims of Integrated Goods and Services Tax (IGST) refunds by exporters could exceed Rs 1,000 crore, which led to CBIC identifying “risky exporters” and manually checking their Integrated GST (IGST) refund claims.

For these “risky exporters”, it was decided that while exports are allowed immediately, but refunds would be released after verification of input tax credit (ITC) within a maximum of 30 days.

The introduction of manual checks in IGST refunds is aimed at preventing unscrupulous exporters from defrauding the exchequer, the CBIC had said.

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