Sikkim-Based Units Under CGST Scanner for Rs 1,032 Crore GST Refund Irregularities

Several manufacturing units based in Sikkim are currently under the scanner of the Central GST (CGST) authorities for alleged irregularities in GST refunds amounting to approximately Rs 1,032 crore. The investigation is focused on the misuse of the Scheme of Budgetary Support, which was introduced in 2017 to compensate eligible industrial units in certain states for the GST they paid. The scheme is only applicable to units that were previously eligible for area-based excise duty exemptions. Investigators found that many companies, including some large corporate houses, were claiming refunds at a much higher rate of value addition than what is permissible under the scheme's guidelines. This led to them receiving excess budgetary support since 2017. Several firms have reportedly admitted to claiming these inflated refunds during the ongoing summons proceedings.