Standard Operating Procedure for GST Exporters
The Central Board of Indirect Taxes and Customs (CBIC) has released a Standard Operating Procedure for exporters to streamline GST refund processes and combat fraudulent claims. This SOP outlines specific verification measures by authorities and details the information exporters must provide, including GST-related, financial, and supplementary data. It also provides a clear escalation mechanism for exporters if their refunds are delayed, ensuring timely resolution of grievances.
The Central Board of Indirect Taxes and Customs (CBIC) has released a Standard Operating Procedure (SOP) for exporters under the Goods and Services Tax (GST) regime. Under GST law, taxpayers can make zero-rated supplies either without paying tax or by paying tax and then claiming a refund. The refund mechanism has unfortunately been exploited by dishonest individuals using various methods, including fictitious exporters and fake invoices, to claim undue refunds.
Government Actions to Prevent Fraud
To minimize revenue loss from fraudulent activities, the government has implemented stringent measures. These include selecting a small number of exporters for intensive verification using data analytics and AI. For these selected exporters, refund processes are temporarily halted, and their export consignments undergo a 100% customs examination. While necessary, these verification procedures can inconvenience legitimate taxpayers.
Exporter Standard Operating Procedure (SOP)
Recognizing the potential difficulties for honest taxpayers due to these verifications, exporters are required to adhere to a specific Standard Operating Procedure (SOP) designed to streamline the process.
- Exporters whose refund processes are temporarily suspended are notified promptly and requested to submit specific data using a provided proforma, which they can also submit proactively.
- The department aims to finalize verification within 14 days of receiving this information. Additional details may be requested by the jurisdictional authority if necessary.
- If verification extends beyond 14 days:
- The jurisdictional officer must inform a designated nodal cell within the office of the jurisdictional Principal Chief Commissioner or Chief Commissioner.
- Taxpayers can also independently escalate the issue to the relevant Principal Chief Commissioner or Chief Commissioner via email.
- In such instances, the Principal Chief Commissioner or Chief Commissioner should strive to resolve the matter within seven days.
- Should a refund remain pending for over a month, the exporter should file a grievance on www.cbic.gov.in/issue. A committee led by the Member GST, CBIC, will address these grievances. All submissions must include essential information such as GSTIN, IEC, Shipping Bill Number, Port of Export, and the CGST Formation where the prescribed details were submitted.
Required Proforma Information for Verification
Exporters must supply the following details for verification purposes:
GST-Specific Data
- GSTIN (Goods and Services Tax Identification Number)
- Information regarding the proprietor's, director's, or partner's connections with other businesses:
| S. No. | Name of Director/Partner/Proprietor | Name of the Other Entity | PAN (DIN if director) | GSTIN | Registration Status (Active/Inactive) |
|---|---|---|---|---|---|
| 1 | |||||
| 2 | |||||
| 3 |
- Previous financial year's turnover (for new entities, current financial year's turnover up to the present date, if applicable).
- GST liability specifics:
| S. No. | Return Type | Declared Aggregate Liability for Previous Financial Year | Declared aggregate liability for Current Financial Year |
|---|---|---|---|
| 1 | GSTR-3B | ||
| 2 | GSTR-1 |
- Input Tax Credit (ITC) data:
| FY | ITC Available in GSTR-2A | ITC Available in GSTR-3B | Mismatch | Details of Payment or Reversal of Mismatched ITC |
|---|---|---|---|---|
| 2017-18 | ||||
| 2018-19 | ||||
| 2019-20 |
- Refund claims from the previous and current financial years:
| S. No. | GSTIN | Type of Refund | ARN No. and Date | Amount Claimed | Amount Sanctioned | Authority From Which Refund Claimed |
|---|---|---|---|---|---|---|
- A summary of e-way bills generated during the relevant period:
| S. No. | Supplies | No. of e-Way Bills Generated | HSNs | Taxable Amount |
|---|---|---|---|---|
| 1 | Inward | |||
| 2 | Outward |
Financial Data
- Bank account details for the entity, including accounts belonging to proprietors, partners, or directors:
| S. No. | Account Number | IFSC Code | Account Type | Name of Account Holder | PAN of Account Holder | Date of Opening of Bank Account |
|---|---|---|---|---|---|---|
- Six months of bank statements for all aforementioned bank accounts.
- Bank Realisation Certificates (BRCs) or Foreign Inward Remittance Certificates (FIRCs) as proof of foreign remittances received for exports over the last year.
- A bank letter confirming up-to-date Know Your Customer (KYC) compliance for all provided bank accounts.
- Details of the top five creditors and debtors (including their GSTINs) associated with the bank account(s) designated for refund receipts and major business transactions (payments and receipts).
Supplementary Information
- A copy of the Permanent Account Number (PAN).
- A copy of the Importer-Exporter Code (IEC).
- Certificate of incorporation or the partnership deed.
- Rent agreements for all business premises, accompanied by geo-tagged photographs.
- Telephone bills for the last three months for all business locations.
- Electricity bills for the last three months for all business locations.
- Employee count, along with Provident Fund (PF) statements as proof of employment.
- Copies of specific schedules from the most recent income tax return:
- Depreciation calculation for plant and machinery as per the Income Tax Act.
- Depreciation calculation for other assets as per the Income Tax Act.
- A consolidated depreciation summary for all assets under the Income Tax Act.