Dear Professional Colleagues,

Erstwhile SOP

• Erstwhile SOPs provided that DGARM would identify the exporters and their suppliers based on risk parameters, approved by the Competent Authority and would forward the list of such exporters to the Risk Management Centre for Customs (RMCC) for putting an alert in the system.
• In such cases, the Customs field formations were required to conduct a detailed examination of the export goods of such identified exporters.
• Further, the jurisdictional CGST formations were required to verify such identified exporters and their suppliers and forward the verification report to DGARM.
• On receipt of the verification report from CGST formations, DGARM was required to take a decision for issuance of NOC or otherwise.

This SOP was loathed with inefficiencies and delays. Thereby Rule 96 has been amended retrospectively from July 01, 2017 which paved the way for a new SOP on the risky exporters.

New SOP

• DGARM based on data analysis and risk parameters, would identify the exporters where verification of credentials of the exporter, including the availment of ITC by the exporter, is considered essential before the grant of refund.
• DGARM would then place an all-India alert on such an exporter.
• Once an alert is placed on an exporter, the IGST refunds of such exporters would be withheld. Data in respect of Shipping Bills filed by such exporter, would be transmitted to GSTN through ICEGATE for the generation of refund claims in FORM GST RFD-01.
• Such refund claims, together with the risk parameters will be made available to the jurisdictional officer.
• On receipt of such refunds, the jurisdictional officer shall immediately process such refund claims in a manner similar to other RFD-01 refunds. However, it may be noted that as these refund claims have been generated by the system on the basis of Shipping Bills/ Bills of Export filed by the exporter, these claims would be auto-acknowledged by the system, and no Deficiency Memo in Form GST RFD-03 can be issued against such system generated Form GST RFD-01 refund claims.
• The proper officer shall ascertain the genuineness of the exporter & verify the correctness of availment and utilisation of ITC by the exporter, and exercise due diligence. The proper officer may conduct the physical verification of places of business of the exporter, if required, to ensure that the exporter exists at his declared place of business and is functional/active.
• The proper officer shall pass a detailed speaking order in respect of the refund claim and shall duly upload the same along with the refund sanction order in Form GST RFD-06 on the portal.
• GSTN shall transmit the data regarding the outcome of processing of refund by the proper officer and the feedback received from the proper officer on the requirement of removal or continuation of alert, to DGARM for necessary action for removal or continuation of alert.