Guidelines issued by CBIC on EGM errors hampering the IGST refund processing

New Delhi, Jan 5 (KNN) Central Board of Indirect Taxes (CBIC) has issued some important guidelines with respect to processing of IGST refund claims on exports. As it is found that in few cases particularly for the LCL cargo consignments originating from ICDs, Export General Manifest (EGM) related errors has been hindering smooth and automatic sanction of IGST refund claims.

In the issued guidelines, CBIC has instructed all the custodians /carriers/shipping lines operating at ICDs/ gateway ports to file the EGM online.

In a letter to all principal chief commissioners/chief commissioners of customs, CBIC said “It was explained that due to manual filing of EGM in respect of Shipping bills originating from ICDs, system is unable to match the gateway EGM and the local EGM. Therefore, it was instructed that all the custodians / carriers / shipping lines operating at ICDs/ Gateway ports should file EGM online.”

It is re-iterated that the first step would be that the concerned stakeholders at the originating ICDs file the local EGMs online, it added.

After examining the nature of errors, CBIC found the main reasons for such EGM errors as follows: online filing of both local and gateway EGM not being done on time by the concerned stakeholders; mismatch in local and gateway EGM details wherever both are filed online, non-filing of stuffing report by the preventive officers at gateway ports for the LCL cargo being consolidated at the Gateway Ports/CFSs in the system.

Where the export goods are directly moved by truck to the gateway port, in such cases, CBIC said that filing the local EGM timely should not pose any problem.

At inland ICDs/CFSs connected by train, the local EGM shall be filed before the goods actually move out of ICD/CFS, it added.

While, in cases where ICDs/CFSs not connected by train but where the movement of export goods begins from the nearest train-based ICD/CFS, it has been observed that local EGM is not being filed as the train number is not known to the custodian for the want of Rail receipt.

In such cases, CBIC said “It must be ensured that local EGM is filed by the custodian immediately after getting train details in which containers are moving to gateway port but in any case, before the train leaves for the gateway port. Officers at these stations shall constantly monitor to check the pendency and take necessary action.”

Non-filing of EGM clearly hints at non-compliance by the custodian/person in charge of the conveyance carrying export goods. Section 41 of the Customs Act authorizes the customs officer to take action against such non-filers, said CBIC.

However, more than invoking the penal sections, jurisdictional Commissioners need to constantly monitor the activity of timely filing of the EGM and take necessary steps to ensure the same, CBIC instructed.

With regard to this issue, CBIC has instructed its jurisdictional officers to take all necessary steps to ensure that all EGMs of cargo related to past cases are filed before 31st January 2019. However, continued non-compliance beyond 1st February, 2019 may be dealt strictly by taking recourse to penal provisions in accordance with the law.

With regard to mismatch in local EGM and gateway EGM, CBIC said “Customs officers in charge of CFSs shall provide list of Shipping Bills having SB006 error i.e. EGM errors to the concerned CFSs at gateway ports.”

The custodians shall in turn provide details as mentioned in tally sheets or CDP/CLP (containing container details) relating to the said SBs to the Customs officers.

Simultaneously, gateway port officers shall coordinate with the officers of the originating ICDs/ CFSs to obtain relevant particulars in accordance with the procedure in para (iv) above.

It shall be the responsibility of the officers in charge of CFSs at Gateway ports to obtain necessary details from the stakeholders which establish the linkages between the goods received from inland ICDs/ CFSs and those exported out of India except in cases where the local EGM has not been filed in which case the responsibility would be of the officers manning the inland ICD/CFS, CBIC instructed.

CBIC said “Export of goods out of India is an essential condition for grant of IGST refund as provided in Rule 96 of CGST Rules, 2017. It therefore warrants verification whether the goods were indeed exported out of India where the IGST refund claims have been long pending with EGM error (SB006).”

CBIC examined that in some gateway ports, the preventive officers are entering stuffing report in ICES application of customs EDI system pertaining to the shipping bills filed only in gateway port, but not for the shipping bills which have been filed in ICDs.

In this regard, CBIC said “It is important that preventive officers posted in gateway ports should enter stuffing reports for all shipping bills irrespective of the fact from where they have been filed i.e in gateway port or ICDs.”

Further, in order to avoid the problem of mismatch in information in local and gateway EGMs, the preventive officers must play a proactive role, it added.