Summary: Many exporters, like Chintamani, face issues receiving their IGST refunds despite timely GST compliance. CA Sachin clarifies that such delays often stem from being flagged as a ‘Risky Exporter’ by the Directorate General of Analytics and Risk Management (DGARM), leading to suspension of the Import Export Code (IEC) and a “GST Process Closed” status. This classification, intended to curb fraudulent claims, can unfortunately impact genuine exporters due to system triggers or data discrepancies. To resolve this, exporters must submit a system-generated refund application, necessary documents, and undergo detailed verification by a GST officer. Only after the officer’s positive report will DGARM consider revoking the alert. Until then, all export consignments will face 100% verification, leading to increased time and cost. The process aims for transparency, but currently lacks formal communication to exporters about the alert’s invocation, often causing significant business disruption due to withheld funds. Recommendations include releasing Drawback and RoDTEP refunds immediately, establishing a transparent verification Standard Operating Procedure with timeframes, and refining DGARM’s procedures to target only fraudulent exporters.
Chintamani (fictional character) runs into Export refund trouble – and CA Sachin steps-in with clarity on the Alert of Risky Exporter by DGARM.
ππ‘π’π§πππ¦ππ§π’: CA Sirβ¦ Iβm in trouble
We made exports, filed all our GST Returns and paid GST too on time to claim IGST refund, but itβs been weeks β still no refunds credited. Har bar toh aa jata hai ! Is month Sarkar ka GST collection kum pad gaye kya ?
ππ ππππ‘π’π§:Β Calm down, Chintamani! Letβs look into it step-by-step. Can you share few details to check your case first.
ππ‘π’π§πππ¦ππ§π’: Yes, hereβs the login credentials and shipping bill summary. Weβve exported in good faith β we are fully compliant !
ππ ππππ‘π’π§: Hmm… here’s the issue… Your IEC has been suspended, and showing “GST Process Closed”.
ππ‘π’π§πππ¦ππ§π’: CA Sahab… is baar aasan sabdo me nahi bataoge kya…!
ππ ππππ‘π’π§ : In simple words, You have been marked under the βRisky Exporterβ category by DGARM (Directorate General of Analytics and Risk Management).
Thatβs why your IGST refund is on hold.
ππ‘π’π§πππ¦ππ§π’: Risky.. Risky what?? Risky Exporter?? We are completely risk-free.
Moreover, we are a regular exporter , and filed all the GST returns well within time!
ππ ππππ‘π’π§: This situation is becoming increasingly common β even Genuine Exporters sometimes get flagged due to data validations or system triggers.
ππ‘π’π§πππ¦ππ§π’: Now what, CA Sahab ? How can i get my stuck IGST refunds ?? Its a huge amount… whole business is getting affected due to blockage of funds!
Sir please help usβ¦
ππ ππππ‘π’π§: Yes Chintamani Donβt worry! Such cases needs to be handled carefully with:
β System Generated Refund application on GST
β Document submissions
β Detailed verification by the GST officer before refund sanction
β Only after the report of GST officer, DGARM would verify and decide on revocation of the alert
ππ‘π’π§πππ¦ππ§π’: Any thing more we need to take care of ??
ππ ππππ‘π’π§: Yes, till the time the alert is live, all your export consignment would be subject to 100% verification. Customs Officer will clear goods only after due verification.
ππ‘π’π§πππ¦ππ§π’: OMG! We have many consignments lined-up.. 100% verification would increase the time and cost of exports then!
ππ ππππ‘π’π§: Yes extra time and cost. But after revocation of this Risky Exporter Alert this issue will done-away. Till that time, you need to plan it accordingly.
ππ‘π’π§πππ¦ππ§π’: Bass CA Sahab, ab aap hi ho mera refund ka rasta !
Maan gaye… aapne toh IGST refund ko bhi simple bana diya! #LetsMakeTaxSimple
ππ ππππ‘π’π§: Thank you, Chintamani!
In exports, compliance is everything – letβs fix this & get your refund rolling!
Tips for Exporters :
Check out our video on Exports and GST refunds on :
TaxGuru – https://taxguru.in/goods-and-service-tax/refunds-gst-regime.html
Our View / Recommendation on Risky Exporter Alert :
- This alert and verification of risky exporter was introduced with the intention to catch-hold those few mischievous exports who were fraudulently claiming undue Refunds and benefits from Government. However, many genuine exporters are getting affected due to long-drawn verification process and excessive documentations, only after which refunds are released.
- On ground level, many exporters have faced the issue that a Negative report was submitted by the division officer and then exporter has to go through super lengthy verification process.
- Business of exporters are severely impacted due to stoppage of refunds in this Alert of Risky Exporter.
- Refunds of Drawback and RoDTEP should not be withheld and should be released immediately.
- There has to be transparent well-defined SOP for verification with time-frame, so that the business of exporters is not adversely affected.
- There has to be a formal communication with reasons by the Department about this alert, as no notice is issued to exporter about the alert being invoked.
- DGARM should update its procedure so that alert is invoked only on the fraudulent exporters and not on genuine ones.
Read my detailed article published on TaxGuru Website on Alert of Risky Exporter –
Risky Exporter Alert: All you need to know!
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Author: I am CA Sachin M Jain, practising Chartered Accountant from Mumbai, dealing in GST & Customs. Specialised in GST, mainly dealing with Exporters and Real Estate clients for Advisory, Refunds, Review and Appeal based all over India. You can connect with us on +91 8097515447 and casachinmjain@gmail.com
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