Who are Risky Exporters?
Under the Goods and Services Tax (GST) system, there is no specific category of “risky exporters.” However, there are certain exporters who may be considered at higher risk or subject to increased scrutiny due to various factors. These factors may include:
- Exporters with a history of non-compliance: Exporters who have previously violated GST regulations or have a record of non-compliance with tax authorities may be considered at higher risk.
- Exporters involved in fraudulent activities: Those engaged in fraudulent practices, such as claiming input tax credit (ITC) on non-existent or fake invoices, may be classified as risky exporters.
- Exporters with a high volume of exports: Businesses involved in large-scale exports, particularly if their export values are significantly higher than their domestic sales, may be subject to closer scrutiny to ensure the legitimacy of their transactions.
- Exporters involved in sectors prone to tax evasion: Certain sectors, such as textiles, gems and jewelry, and commodities, are considered more susceptible to tax evasion. Exporters operating in these sectors may face increased scrutiny.
- Exporters with mismatched or suspicious transactions: Exporters with transactions that have inconsistencies, discrepancies, or suspicious patterns may attract the attention of tax authorities. For example, if the value declared for exports differs significantly from the market value of the goods.
It is important to note that the classification of risky exporters can vary across jurisdictions, and tax authorities have their own methods of assessing and identifying potential risks. Additionally, the GST landscape is subject to change, and new regulations or guidelines may be implemented to address specific concerns related to exports and risk management.
Circulars issued by the Government of India with regard to the Risky Exporter:
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Circular 131-1-2020 Dated the 23rd January, 2020
DGARM vide this circular provided the procedure to be followed for verification of the risky exporters and their suppliers.
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Instruction no 04/2022 dated 28-11-2022
It provides the manner of processing and sanction of IGST refunds, withheld in terms of Rule 96(4)(c) of the CGST Rules, 2017 transmitted to the Jurisdictional Officer under Rule 96(5A) of the CGST Rules, 2017.
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Instruction No. 03/2022-GST dated 14 June 2022
It provides the procedure relating to sanction, post-audit, and review of refund claims.
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