CAG asks FinMin to put in place online Customs refund system

New Delhi: The Comptroller and Auditor General (CAG) has asked the Ministry of Finance to consider having an online system for processing customs refunds along the lines of the GSTN system to make it more efficient.

The official auditor has also flagged "inordinate delays" in the implementation of the module for daily updation of exchange rate and asked to make the system operational at the earliest.

Under the Customs Act, refunds can be claimed in cases where the imported goods are found to be defective or not in conformity with the specification agreed upon, when the goods are exported after payment of the export duty/cess and the exported goods are returned to the exporter.

A refund can also be claimed by a person who has paid duty on assessment of imported goods and applies for refund of duty consequent on remission /abatement of duty due to pilferage/damage of goods.

"The Ministry may consider having an online workflow for capturing and processing refunds on the lines of the GSTN System so that the Department is able to electronically keep track of BEs against which refund has been applied for. This would make the monitoring of refund cases more efficient, effective and transparent," CAG said.

The CAG observed that the Central Board of Indirect Taxes and Customs in February 2014 stated that testing of a module for daily update of exchange rate through message exchange with State Bank of India (SBI) had been completed and commissioning of the same can be decided only after the technical issues with SBI get resolved.

Subsequently, the module has been redesigned and the final 'Go-Live' prerequisites are being completed by SBI.

The CBIC determines the rate of exchange of conversion of major transactional foreign currencies generally after every 14 days on a regular basis and issues Notifications (Non-Tariff).

If import and export are made at rates other than the foreign currencies mentioned in the notification, then the importer/exporter has to produce a certificate of exchange rate on the day of filing of bills of entry/ Shipping Bills from the SBI.

The CAG said implementation of a system which captures daily fluctuation in the exchange rate, will minimise the undue benefit or loss to importers and exporters and correspondingly to the Department.

"The module for daily updating of the exchange rate may be made operational at the earliest," the CAG said.

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