A circular about the prevention of malpractices and fraud was released on 23 January 2020. The notice issued by the Government of India states that going forward exporters will need to comply with the Standard Operating Procedure (SOP) so that fraudulent granting of Input Tax Credit (ITC) based on fake invoices is avoided.
The Principal Commissioner for Goods and Services Tax (GST) Policy Wing, Yogesh Garg under the Ministry of Finance’s Revenue Department, GOI issued the circular to the Principal Chief Commissioner, Chief Commissioner, and Principal Commissioners.
CBIC issued the circular based on the identification of several cases wherein exporters had obtained fraudulent ITC using fake invoices. ITC benefits were availed by exporters who did not even exist under the Integrated Goods and Service Tax Act (IGST).
Also, after several cases of fraudulent claims were identified, the Indian government has outlined a strict procedure to do a verification check of exporters so that fraudulent ITC can be tackled.
The Union/Central Government will execute the verification under the Central Goods and Service Tax Act (CGST) at the CGST Office, within a 14-day time frame. The exporter is expected to provide all of the information which is required for completing the verification process. In case the time frame of 14 working days lapses, a nodal cell will be designed, and the verification will be done within seven days.
Nevertheless, if the concerned authority does not comply with the procedure mentioned above, an exporter needs to submit his/her complaints about non-verification via the official CBIC website. The exporter will need to provide all data, including GSTIN, Shipping Bill Number, IEC etc. The CBIC also said that the Committee, which will be headed by Member GST, CBIC, will discuss all grievances to resolve them.
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