The government has found that over 1,200 exporters are untraceable at their given addresses after it undertook an investigation on the basis of data analysis that threw up inconsistencies in refund claims. These exporters had claimed over Rs 350 crore in refunds, which have now been halted, top revenue department officials said.
Sources said some customs broker might be instrumental in setting up fictitious entities which existed only in virtual space through identity thefts with fake and morphed documents. Customs brokers are licensed by the government to help exporters in relevant documentation, tax payment and general consultation.
Although the Central Board of Indirect Taxes and Customs (CBIC) has mandated that customs brokers carry out independent verification of KYC norms for exporters, sources said recent cases of IGST refund fraud have pointed to at least 50 brokers who could have indulged in illegal availing of of refunds. “These brokers are also under the lens,” a top tax official said.
Over the last five months, 800 exporters have been barred for exporting merchandise overvalued by Rs 1,500 crore to claim fake IGST refunds. “Tax officials are now working with rich data available in GST returns and e-way bills, and every fraudster leaves a long digital trail and cannot escape the law,” the official quoted above said.
For instance, sources said a Delhi-based exporter had claimed refunds of nearly Rs 10 crore for exporting ready made garments to an SEZ, but physical scrutiny conducted on the provided address showed that the firm did not exist. The physical scrutiny was undertaken after the data analytics revealed discrepancy in the firm’s returns.
“Using a web of fake invoicing of over Rs 847 crore, the firm created a fraudulent credit of `195 crore. Investigations led to discovery of untraceable suppliers. Documents evidencing deemed exports shown to Moradabad SEZ were also fake with forged stamps of officials having been used. It was also found that the exporter had already claimed Rs 17.3 crore as refunds,” another tax official said.
Sources said the revenue department is engaged in risk evaluation of exporters with the help of predictive modelling. In this connection, regular strategy meetings are being held at a very high level by the revenue secretary with data analytic experts, state and centre tax investigators, the official said.
Source: Financial Express