(Photo: Indranil Bhoumik/Mint)
(Photo: Indranil Bhoumik/Mint)

Bogus GST refund racket by exporters busted

  • Using fake invoices, the exporters are estimated to have claimed input tax credit of more than 470 crore which was further utilised
  • DGGI and DRI carried out search operations at 336 different locations across the country to unearth the racket worth 3,500 cr

New Delhi: In a nationwide crackdown, central government agencies dealing with indirect tax evasion have bust a racket of exporters claiming tax refunds fraudulently, finance ministry said on Thursday.

After searches were held at 336 different locations across the country on Wednesday, officials of Directorate General of GST Intelligence (DGGI) and Directorate General of Revenue Intelligence (DRI) have tracked down exporters who were fraudulently claiming refund of Integrated GST (IGST), the ministry said.

Using fake invoices, the exporters are estimated to have claimed input tax credit (ITC) of more than 470 crore which was further utilized for making exports on payment of IGST and subsequently claiming cash refund of the same, the ministry said. The invoice value of transactions on which input tax credit was fraudulently claimed was about 3,500 crore, the ministry said. It also said that a tax refund amount of around 450 crore is under examination.

"Some live export consignments of these exporters have been intercepted at Vadodara Rail Container Terminal, Mundra port and Nhava Sheva port for examination in order to ascertain mis-declaration," said the statement.

The agencies were able to track down the fraud since GST is a technology oriented tax system that makes data gathering and analysis easy.

The ministry said the operation covered entities in as many as 15 states including Delhi, Haryana, Uttar Pradesh, Gujarat, Maharashtra, Tamil Nadu, West Bengal and Karnataka.

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