Page 89 - DRI ANNUAL REPORT EBOOK
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The misdeclared goods were being exported to their own subsidiary unit in Hong Kong and the export proceeds were arranged through other entities in Hong Kong. The quantity of gold misdeclared by the above modus is about 1800 kgs valued at approx. Rs.550 crores.
IGST REFUND FRAUD
Exporters are eligible for refund of IGST paid on exported goods or they can claim accumulated Input Tax Credit (ITC) as refund. There have been instances where fraudulent exporters availed ITC on the invoices of non-existing fake units. It is seen that miscreants are claiming IGST refunds based on free shipping bills which pass through Customs with less scrutiny. However, DRI has detected such instances based on data analytics and shared information with DGGI and GST formations.
In one such joint operation by DRI and DGGI, searches were carried out at 336 different locations across the country in September, 2019. Investigations revealed that many exporters were availing IGST refunds, on ITC availed based on fake supplies. The operation revealed that many of the entities were either non-existent or had given fictitious addresses. The amount of suspected IGST refund fraud in this modus by fly-by-night operators was to the tune of Rs. 920 crores.
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