Refunds can be claimed under the Customs Act in situations where imported goods are defective or do not meet the agreed upon specifications, when exported goods are returned to the exporter after payment of export duty/cess, and when duty is paid on imported goods but refund is requested due to pilferage/damage of goods.
“The Ministry should consider implementing an online workflow for capturing and processing refunds similar to the GSTN system. This would allow the Department to electronically track refund applications against Bill of Entries (BEs), making the monitoring of refund cases more efficient, effective, and transparent,” stated the CAG.
The CAG noted that the Central Board of Indirect Taxes and Customs mentioned in February 2014 that the module for daily update of exchange rates through message exchange with State Bank of India (SBI) had been tested and could be commissioned once the technical issues with SBI were resolved.
Subsequently, the module has been redesigned and the final ‘Go-Live’ prerequisites are being completed by SBI. The CBIC determines the exchange rate of major transactional foreign currencies approximately every 14 days and issues Notifications (Non-Tariff). If import and export transactions are conducted at rates other than those mentioned in the notification, importers/exporters must provide a certificate of exchange rate from SBI on the day of filing bills of entry/Shipping Bills.
The CAG emphasized that implementing a system that captures daily fluctuations in exchange rates would minimize undue benefits or losses for importers, exporters, and the Department.
“The module for daily updating of the exchange rate should be made operational as soon as possible,” the CAG recommended.