Criteria for identifying risky exporters not made clear by CBIC: Expert

A subsequent Circular, says that only a miniscule percentage of export consignments are being selected for examination on account of risk associated with fraudulent availment of IGST refunds

Q. My query is regarding circular No. 16/2019-Customs dated June 17, 2019. I understand large numbers of exporters have been put on alert by RMCC subject to 100 per cent mandatory examination of export consignment relating to risky exporters. What are the criteria to identify risky exporters? Please advise remedial measures for exporters.

That Circular only says, “DG (Systems) shall work out the suitable criteria to identify risky exporters at the national level and forward the list of said risky exporters to Risk Management Centre for Customs (RMCC) and respective Chief Commissioners of Central Tax. DG (Systems) shall inform the respective Chief Commissioner of Central Tax about the past IGST refunds granted to such risky exporters (along with details of bank accounts in which such refund has been disbursed)”. A subsequent Circular no. 22/2019-Customs dated July 24, 2019, says that only a miniscule percentage of export consignments are being selected for examination on account of risk associated with fraudulent availment of IGST refunds. However, keeping in view the issues raised by the trade, the Board has decided that the requirement of 100 per cent physical examination of each export consignment shall be gradually relaxed provided no irregularity was noticed in earlier examinations of export consignments of export entities in terms of Circular No. 16/2019-Customs dated June 17, 2019. It also says that that RMCC shall take into consideration the feedback received from field formations with regard to the 100 per cent examination conducted on exports of risk-based identified entities and wherever the examination has validated the declaration made in the shipping bill, RMCC may review the risk assessment and gradually taper down the percentage of physical examination. Suitable alerts based on re-evaluated risk may accordingly be inserted in the system by RMCC in such cases, the Circular says. 

Q. We had exported certain goods where initially we had inadvertently paid lower IGST under refund claim. Subsequently, after two months, we paid the differential amount of tax. Are we required to pay interest on the same?

In my opinion, you must pay the interest.  

Q. Can you let me know the process of e-commerce through courier and post?  

In case of exports through courier, you have to follow the procedure prescribed in the Courier Imports and Exports (Clearance) Regulations, 1998. For exports by post, you have to follow the procedures prescribed in the Exports by Post Regulations, 2018. The forms to be filled in by you for exports through e-Commerce are also given in the said Regulations. 

Q. As an EPCG authorisation holder, we did job-work for an exporter by way of embroidery on garments and invoiced the exporter for the job-work done. Can invoice value in rupees representing job-work go towards discharge of export obligation (EO)? Is it in order to convert the rupee value of invoice into USD at the exchange rate prevalent on the date of issuance of authorisation?

There is no provision in the EPCG scheme to count such rupee earnings on domestic job-work towards discharge of EO.

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