NEW DELHI: Over 1,300 exporters who have wrongfully claimed Goods and Services Tax (GST) refunds worth Rs1,875 crores have been found untraceable at their main place of business, said a government official. The government has also identified 7,516 entities as risky exporters going by the red flags raised by various statutory agencies, the official said.
The detection of 1,377 exporters, seven of them accredited as star exporters, vanishing from their place of business comes at a time the tax authorities are turning their attention back to compliance enforcement after having given relief to businesses hit by the coronavirus crisis. The industry was given extra time to file tax returns and audit reports in addition to relief on interest and late fee payable.
The Central Board of Indirect Taxes and Customs (CBIC) has also received adverse reports about three other star exporters. These 10 star exporters together have claimed integrated GST (IGST) refund of Rs 28.9 crore deceitfully, said the official, who spoke on condition of anonymity.
Refund of tax credits has always been a thorny issue with officials trying to make sure fraudulent claims are not granted, while businesses claim that delays in refund processing affect their liquidity. Claiming tax refunds fraudulently has been a common practice of tax evasion in the industry. GST, which follows a system of levying tax at each stage of the value addition in the industry and relies heavily on technology, has made it easier for the authorities to profile tax payers based on their compliance track record.
The official quoted above said authorities have suspended IGST refund or drawback claim worth Rs1,363 crore in the case of 2,830 risky exporters. Adverse reports have been received in the case of many others, said the official. Exporters get refund of the taxes that go into the raw materials and services used as it cannot be part of the international price of their exports.
Exporters are identified as ‘risky’ on the basis of specific risk indicators based on data relating to customs, GST, income tax and foreign trade transactions. Details of the identified risky exporters are shared with field officials for physical and financial verification, the official said. —Agencies

KR Desk