Chintamani (a Fictional character) runs into Export refund trouble and CA Sachin steps in with clarity on the Alert of Risky Exporter by DGARM.
Chintamani: CA Sir… I'm in trouble.
We made exports, filed all our GST Returns, and paid GST on time to claim the IGST refund. But it's been weeks, still no refunds credited. Every other time it comes! Did the government's GST collection fall short this month?
CA Sachin: Calm down, Chintamani! Let's look into it step-by-step. Can you share a few details so I can check your case first?
Chintamani: Yes, here are the login credentials and the shipping bill summary. We've exported in good faith - we're fully compliant!
CA Sachin: Hmm... here's the issue. Your IEC has been suspended, and it shows "GST Process Closed".
Chintamani: CA Sahab... can you explain in simpler words?
CA Sachin: In simple terms, you have been marked as a 'Risky Exporter' by DGARM (Directorate General of Analytics and Risk Management). That's why your IGST refund is on hold.
Chintamani: Risky... Risky what? Risky Exporter? We are completely genuine and compliant exporters!
CA Sachin: This situation is becoming increasingly common. Even genuine exporters sometimes get flagged due to system triggers or data mismatches.
Chintamani: Now what, CA Sahab? How can I get my stuck IGST refund? It's a huge amount... and the entire business is getting affected due to blocked funds. Please help us...
CA Sachin: Don't worry, Chintamani. These cases need to be handled carefully with:
- System-generated refund application on GST Portal
- Submission of all necessary documents
- Detailed verification by the GST officer before sanctioning the refund
- Only after the officer's report, DGARM will verify and decide whether to revoke the alert
Chintamani: Anything else we need to take care of?
CA Sachin: Yes. As long as the alert is active, all your export consignments will be subject to 100% verification. Customs officers will clear goods only after thorough checks.
Chintamani: OMG! We have many consignments lined up. 100% verification will increase the time and cost of exports!
CA Sachin: Yes, that's correct. There will be extra time and cost involved. But once the Risky Exporter Alert is revoked, things will get back to normal. Until then, plan accordingly.
Chintamani: That's it, CA Sahab. Now you are my only hope for getting the refund! You've even made IGST refunds sound simple. #LetsMakeTaxSimple
CA Sachin: Thank you, Chintamani!In exports, compliance is everything. Let's fix this and get your refund rolling!
Tips for Exporters: Check out our video on Exports and GST refunds:
Our View / Recommendation on Risky Exporter Alert
- The alert and verification system was introduced to catch those who fraudulently claimed undue refunds. However, many genuine exporters are getting affected due to long and document-heavy verification processes.
- On the ground, exporters have faced situations where even after compliance, a negative report was submitted by the division officer, leading to a lengthy re-verification process.
- Exporter businesses are severely impacted due to refund delays.
- Refunds of Drawback and RoDTEP should not be withheld and must be released immediately.
- There should be a transparent and time-bound SOP for verification to ensure exporters' businesses are not affected.
- The department should formally communicate with exporters about the alert-currently, no prior notice is issued.
- DGARM should improve its procedure so alerts are triggered only for fraudulent exporters, not genuine ones.
Read my detailed article on CAclubindia: Click Here
The author is a practicing Chartered Accountant from Mumbai, specializing in GST & Customs, especially for exporters and real estate clients. He can also be reached at casachinmjain@gmail.com
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