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Resolve risky exporters' issue immediately, release refunds: FIEO

The Federation of Indian Export Organisations (FIEO) said that during the current crisis, exporters are already facing problems and the matter of risky exporters is further adding to their woes. An exporter is tagged as risky if the customs department suspects that duty drawback claims and IGST refunds are on the basis of bogus invoices.

PTI | New Delhi | Updated: 01-07-2020 15:24 IST | Created: 01-07-2020 15:24 IST
Resolve risky exporters' issue immediately, release refunds: FIEO

Exporters' body FIEO on Wednesday demanded fast resolution of issues related to 'risky exporters' and immediate release of their refunds to help them tide over the problems arising due to COVID-19 pandemic. The Federation of Indian Export Organisations (FIEO) said that during the current crisis, exporters are already facing problems and the matter of risky exporters is further adding to their woes.

An exporter is tagged as risky if the customs department suspects that duty drawback claims and IGST refunds are on the basis of bogus invoices. The consignments of risky exporters undergo manual checking before their claims are refunded. The FIEO said that the government can take strict action against erring exporters but should ensure that no innocent is taken to task.

FIEO President S K Saraf said delay in duty drawback and IGST related refund create issues for exporters and the government should look into the matter for its early resolution. Sharing similar views, FIEO Regional Chairman (Western Region) Khalid M Khan said that the government should clearly inform about the reasons for declaring an exporter as "risky" because this tag has several consequences for him/her.

"The issues related with risky exporters should be resolved as early as possible during the current Covid-19 pandemic time. They should not stop incentives/refunds under duty drawback and IGST as we are already facing credit related problems. The standard operating procedure which a risky exporter has to be follow is very complex and there is a need to simplify that," Khan told PTI. He also demanded for reduction in the documentation as it is time-consuming and tedious.

Khan said that the federation is undertaking a survey to see the number of risky exporters in the country and the total amount of incentives stuck due to this. "Exporters have a vested right of tax refunds unless they are proven guilty and also have the right to know on what grounds they are declared risky exporters. The CBIC (Central Board of Indirect Taxes and Customs) should show cause the exporters before calling them risky exporters," he added.

The exporters marked as 'risky' have their IGST/ITC refunds blocked as well as their duty drawback amount is blocked until they are declared non-risky, he said adding such exporters are accountable to complete cargo check at ports and airports which are creating even more hassles for businesses as the customs department does not have enough resources to carry forward such checks. Khan also said that submitting all the required documents that is demanded by authorities is not easy in such crisis times due to the skeleton staff available at the office.

"We need a way out of this. How can somebody be declared risky without even telling him/her the reason?. Only because the RMCC (Risk Management Centre for Customs) picks the company name irrespective of whether you are a defaulter or not, one has to go through the trauma and enquiry," he said..


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