It has also asked the Directorate of Revenue Intelligence (DRI) to take action against those companies which had claimed duty drawback without bringing earnings from exports to India.
In such cases, the country loses on two counts — first by not getting export proceeds and then by wrongful claim of duty drawback, according to a statement from finance ministry.
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According to finance ministry, the data were reviewed at the SIT meeting earlier this month. “From the data provided by RBI, it emerged that huge amount of export proceeds have not been realised,” it noted.
The SIT asked DRI to check how many of these companies claimed duty drawback but failed to bring export proceeds to India. It asked DRI to take necessary action against these companies and inform the SIT of action taken.
Besides, the SIT asked RBI to develop an institutional mechanism and technological system to not only immediately red-flag the cases where exports have been outstanding in violation of Foreign Exchange Management Act (FEMA) guidelines, but also share the complete data with ED and DRI on a monthly basis.
According to the RBI regulations, all exporters have to bring foreign exchange into the country within one year of the date of exports. The data on whether a particular company has brought export proceeds to India or not is maintained by the central bank. Not bringing export proceeds violates the stringent FEMA guidelines and amounts to illicitly parking funds abroad. Further, companies can claim duty drawback on exports made with respect to taxes paid on inputs to items exported. An exporter can claim duty drawback only if it has brought export proceeds to India.
The SIT said it was important for DRI to also have access to such data so that it could see if any exporter had claimed duty drawback without bringing the proceeds to India.