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Circular No. 16/2019-Customs

F. No. 450/119/2017-Cus-IV(Pt.I)
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes& Customs)
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Room No. 227B, North Block
Dated June 17, 2019
To
All Principal Chief Commissioners/Chief Commissioners of Customs/ Customs
(Preventive)/ Customs & Central Tax,
All Director Generals under CBIC,
All Principal Commissioners/Commissioners of Customs/Customs (Preventive)/Customs &
Central Tax.

Subject:–IGST refunds- mechanism to verify the IGST payments for goods exported out
of India in certain cases- reg.

The procedure for claiming IGST refunds is fully automated as provided under Instruction
15/2017-Cus dated 09.10.2017. It has come to the notice of the Board that instances of availment of
IGST refund using fraudulent ITC claims by some exporters have been observed by various
authorities. Exporters have availed ITC on the basis of ineligible documents or fraudulently and
utilized that credit for payment of IGST on goods exported out of India. It has also been observed in
several cases that there is huge variation between the FOB value declared in the Shipping Bill and
the Taxable value declared in GST Return apparently to effect higher IGST pay out leading to
encashment of credit.
2. In view of above, it has been decided to verify the IGST payments through the respective GST
field formations. The procedure specified in the instruction 15/2017-Cus dated 09.10.2017 stand
modified to the extent as under:
A. Identification of Suspicious cases: DG (Systems) shall work out the suitable criteria to
identify risky exporters at the national level and forward the list of said risky exporters to Risk
Management Centre for Customs (RMCC) and respective Chief Commissioners of Central Tax.
DG (Systems) shall inform the respective Chief Commissioner of Central Tax about the past IGST
refunds granted to such risky exporters (along with details of bank accounts in which such refund
has been disbursed).
B. Inserting Alert in the System: RMCC shall insert alerts for all such risky exporters and make
100% examination mandatory of export consignments relating to those risky exporters. Also, alert
shall be placed to suspend IGST refunds in such cases.
C. Examination of the export goods: Customs officers shall examine the consignment as per
the RMCC alert. In case the outcome of examination tallies with the declaration in the Shipping

Bill subject to no other violation of any of provision of the Customs Act, 1962 or other laws being
observed, the consignment may be cleared as per the regular practice.
D. Suspension of IGST refunds: Notwithstanding the clearance of the export consignments as
per para C above, such Shipping Bills shall be suspended for IGST refund by the Deputy or
Assistant Commissioner of Customs dealing with refund at the port of export.
E. Verification by GST formations:
(i) Chief Commissioner of Central Tax shall get the verification of the IGST refund claims and
other related aspects done in accordance with the Standard Operating procedure to be issued by
the GST policy wing.
(ii) The GST formation shall furnish a report to the respective Chief Commissioner of Central
Tax within 30 days specifying clearly whether the amount of IGST paid and claimed/ sanctioned
as refund was in accordance with the law or not.
(iii) Chief Commissioner of Central Tax shall compile and forward report of all cases to RMCC
and concerned customs port of export within 5 working days thereafter.
F. Action to be taken by customs formations on receipt of verification report from GST
formations:
(i) Cases where no malpractices have been reported on verification: On receipt of
verification report from Chief Commissioner of Central Tax informing that the ITC availed
by the exporter was in accordance with the GST Law and rules made thereunder, the Customs
officer at the port of export shall proceed to process the IGST refund to the extent verified by
the GST Authorities. The detailed advisory in this regard shall be issued by DG(Systems) for
the benefit of customs officers handling refunds.
(ii) Cases where malpractices have been reported on verification: For cases where
upon verification, it has been found that the exporter has availed ITC fraudulently or on the
basis of ineligible documents and utilized the said ITC for payment of IGST claimed as refund,
the customs officer will not process the refund claim.
3. Difficulties in this regard may be brought to the knowledge of the Board.
Yours sincerely,

(Zubair Riaz)
Director (Customs)