Validity of the Duty drawback and IGST/unutilized ITC refund of Exporters withheld by categorizing them as “Risky Exporter” on customs portal, Indian Customs EDI System

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Validity of the Duty drawback and IGST/unutilized ITC refund of Exporters withheld by categorizing them as “Risky Exporter” on customs portal, Indian Customs EDI System

 

There are various cases wherein the Duty drawback and IGST/unutilized input tax credit refund of many a exporters are being withheld by the department without assigning any reasons whatsoever by categorizing them as “Risky Exporter” on customs portal, Indian Customs EDI System.

The ostensible purpose of such classification is to prevent refund to an unscrupulous exporter who has availed fraudulent input tax credit. However, it has been observed that such tag is not being removed in almost all the cases despite compliance with the SOP issued by the CBIC vide Circular No. 131/1/2020-GST dated 23-1-2020 for removal such tag.

There is a strict timeline to be observed by the officers to complete the investigation to ensure that genuine exporters are not harassed but exporting community is suffering because of lackadaisical attitude of the department.

In any case in my opinion duty drawback should not withheld at all since in such cases 100% examination of export transactions is done after being tagged as risky exporter and therefore there is no doubt about the veracity of the exports. The only remedy available to an exporter in such cases is to file a writ petition before the jurisdictional High Court and no other effective remedy is available in the GST law.

The same issue was there recently before the Hon’ble Calcutta High Court. The court has recently removed the “Risky Exporter” tag in one such case and directed the authority concerned to process the duty draw back as well as the refund claim of the IGST within three weeks from the date of receipt of the order, subject to verification of the validity of the claim of the petitioner.

 

The case detail is as under:

 

                                                                        LGW Industries Limited & Anr.

                                                                                                            Vs.

             Principal Commissioner, CGST & Central Excise, Kolkata North commissionerate & Ors

                                                                                    W.P.A. 15807 of 2021.

 

The copy of the order is as under:

 

Validity of the Duty drawback and IGST/unutilized ITC refund of Exporters withheld by categorizing them as “Risky Exporter” on customs portal, Indian Customs EDI System

 

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