Exporters wrongfully availing exemptions in cases where exports preceded imports are in for trouble.
India’s primary anti-smuggling intelligence agency, the Directorate of Revenue Intelligence (DRI), has started issuing show cause notices asking such exporters to pay Integrated Goods and Services Tax (IGST) in cases where raw material is imported only after goods are partially or fully exported.
According to the notice, the exporters must pay IGST first as the Foreign Trade Policy has been amended and several notifications have also been issued by the government in the last few months.
These notices could lead to a 100 per cent penalty and interest that the exporters may have to pay in the coming months, it is understood.
It is said that notices have been issued by DRI to about 100 exporters who import goods through Kolkata and Gujarat ports. It is also being rumoured that DRI could issue more notices in the coming weeks.