Tradeindia Exim Newsletter
21, July 2020
IGST fraud: Bring the offenders to book

Media reports last week revealed that a total of 1,377 'exporters' have fraudulently claimed IGST refund amounting to Rs 1,875 crore. They are now untraceable at their principal place of business. It sounds even more shocking that the list includes seven accredited 'star exporters'. This is unfortunate. While the percentage of such untraceable exporters is not that large, the government should immediately step in to end this evil practice tarnishing image of genuine exporters.

The report, quoting an official, adds that as on date, 7,516 exporters are in risky exporter list. Out of them, 2,830 exporters' IGST refund /drawback worth Rs 1,363 crore is suspended. Adverse reports have also been received with respect to 2,197 risky exporters. In addition, offence cases amounting to Rs 115 crore have been detected against identified risky exporters, and out of the 234 suppliers' verification received so far, 82 suppliers have been found non-existing

How such frauds are possible? Every exporter must have an Importer Exporter Code, for which, in turn, he needs a PAN card and a bank account. Before opening a bank account, necessary KYC is done by banks while for PAN card application also proofs of identity and address are required. Exporters are also required to have GST registration. They also need to register themselves at Customs and their bank details are captured so as to credit their IGST amount. Pooling such information available with various agencies will definitely help track the fraudsters down.

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