In a move to check black money, the Special Investigation Team (SIT) set up on the issue has asked the Enforcement Directorate (ED) and Directorate of Revenue Intelligence (DRI) to act against companies claiming duty drawback without repatriating export proceeds, an official said on Thursday.
The SIT has directed the ED to take action under the Foreign Exchange Maintenance Act (FEMA) against 216 companies for the period before March 1, 2016, and 572 companies for the period after March 1, 2016, for which each such company had export proceeds pending for realisation for more than Rs 100 crore, a Finance Ministry release said here.
"The SIT also directed the DRI to check from its database on how many companies have claimed duty drawback but have failed to bring export proceeds, and take necessary action against them as per law," the ministry said.
As per the Reserve Bank of India rules, all exporters have to bring foreign exchange into the country as export proceeds within a year of the date of exports.
The data on whether an exporter has brought export proceeds to the country is maintained by the RBI.
"Not bringing export proceeds is a violation of FEMA as it amounts to illicitly parking funds abroad," the statement said.
"Further, exporters can claim duty drawback on exports made with respect to taxes paid on inputs to exports. Any exporter can claim duty drawback only if the exporter has brought export proceeds into the country," it added.
The SIT also asked RBI to immediately develop an institutional mechanism and information system to immediately red-flag those cases where exports have been outstanding in violation of FEMA guidelines.
Besides, the RBI has also been asked to share complete data with the Enforcement Directorate and DRI on a monthly basis.
The ministry said the SIT had asked RBI to give details of exports made where exports proceeds were yet to be utilised even after a period of more than one year.
In response, the RBI provided data on export outstanding for shipping bills prior to March 1, 2014, pending for more than one year, as well as data on export outstanding for shipping bills on or after March 1, 2014 pending for more than one year.