CBEC to do random checks on exporters claiming refunds

Exporters claiming tax refunds are in for tough times with the CBEC deciding to carry out random audit of their accounts to ensure that tax refund benefits reach the genuine entities alone.

"Each Custom House shall create a special cell (for auditing refunds). Notices will be issued by the Customs Department to recover drawbacks paid on export consignments in respect of which export proceeds have not been realised," CBEC said in a communication to all Chief Commissioners of Customs and Central Excise.
    
The Board has also asked the Commissioners to conduct random checks on exporters to ensure that all export proceeds, on which duty drawback has been paid, are realised.
    
Apex exporters body FIEO welcomed the move with a word of caution that steps should be taken to ensure that genuine exporters are not harassed. "We welcome it, but the CBEC should identify the miscreants and should not harass genuine exporters," FIEO President A Sakthivel said.
    
Exporters receive duty drawback as refund of taxes paid during the course of production of goods that are exported.
    
The Board decided to recover drawback amount from those exporters, who have already received drawback amount, but the sale proceeds in respect of such export items could not be realised within the time allowed under the Foreign Exchange Management Act (Fema), 1999.