The Central Board of Indirect Taxes and Customs reportedly used data analytics to tally data with the Income Tax Department, and under Goods and Services Tax regime and customs to nab the exporters who fraudulently claimed GST refunds

The tax department has identified nine star export houses who misused the GST refund system. The Central Board of Indirect Taxes and Customs (CBIC) reportedly used data analytics to tally data with the Income Tax Department, and under Goods and Services Tax regime and customs to nab the exporters who fraudulently claimed GST refunds.

Ongoing investigations have found nine star export houses 'non-traceable' at their premises declared on record. Out of these, two locations were found sealed and seized by banks as the associated exporters have been declared non-performing assets.

One exporter with over Rs 50 crore of exports of readymade garments has taken a refund of Rs 3.90 crore while its total GST payment in cash was merely Rs 1,650, reported India Today. In another case, tax payments in cash were found to be Rs 51,201, while the exporter obtained GST refund of Rs 9.59 crore, the report said. Investigators are of the view that all such cases involve fake invoicing and fraudulent tax credits, which were cashed through the facility of IGST refunds.

A sample study of 241 star exporters has shown that 40 had declared turnover from business in the range of nil to less than Rs 1 crore in the financial years 2017-18 and 2018-19. Star export houses are recognised under the Foreign Trade Policy by virtue of their export performance being above a certain threshold. Presently, this threshold is $3 million in current and previous three financial years.