TMI BlogSubject: Clarification on issues related to furnishing of Bond/Letter of Undertaking for Exports;X X X X Extracts X X X X X X X X Extracts X X X X ..... oard. 2. Please refer to Notification No. 16/2017 GST dated 7th July, 2017 and Circular No. 2/2/2017 GST dated 5th July, 2017 and Circular No. 4/4/2017 GST dated 7th July, 2017. A large number of communications were received from the field formations and exporters citing variation in the interpretation of above referred notification and circulars. Therefore, in exercise of powers conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017, for the purpose of uniformity in the implementation of the Act, following issues have been clarified as mentioned below: a. Eligibility to export under LUT : Notification No. 16/2017 Central Tax dated 7th July, 2017 specifies conditions to be fulfilled for export under L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T facility as remittance received is less than ₹ 1 crore. iv. An exporter has export turnover of ₹ 40crore. He has received ₹ 2 Crores as foreign inward remittances in FY 2016-17 which is 5% of the export turnover. He will not be eligible for LUT facility as remittance received is less than 10% of export turnover, even though it is in excess of ₹ 1 crore. v. An exporter has received ₹ 1 Crore 10 lacs as foreign inward remittances in FY 2016-17 which is 20% of the export turnover. In this scenario, he will be eligible for LUT facility. It may however be noted that a status holder as specified in paragraphs 3.20 and 3.21 of the Foreign Trade Policy 2015-2020 is eligible for LUT facility regardless of whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The EOUs, to the extent of exports, are eligible for zero rating like any other exporter. f. Forward inward remittance in Indian Rupee : Various representations were received by Board with respect to receipts of proceeds of supplies in Indian Rupee especially with respect to exports to Nepal, Bhutan and SEZ developer/SEZ unit. Attention is invited to Para A (v) Part-I of RBI Master Circular no. 14/2015-16 dated July 1, 2015 (updated as on November 5, 2015), which states there is no restriction on invoicing of export contracts in Indian Rupees in terms of the Rules, Regulations, Notifications and Directions framed under the Foreign Exchange Management Act 1999. Further, in terms of Para 2.52 of the Foreign Trade Policy (2015-2020), al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows: i. an exporter registered with recognized Export Promotion Council can be allowed to submit bond without bank guarantee on submission of a self-attested copy of the proof of registration with a recognized Export Promotion Council. ii. In the GST regime, registration is State-wise which means that the expression registered person used in the said notification may mean different registered persons (distinct persons in terms of sub-section (1) of section 25 of the Act) if a person having one Permanent Account Number is registered in more than one State. It may so happen that a registered person may not satisfy the condition regarding foreign inward remittances in respect of one particular registration, because of splitting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Verification, if any, may be done on post facto basis. Similarly, Status holder exporters have been given the facility of LUT under the said notification and a self-attested copy of the proof of Status should be sufficient. j. Applicability of circulars on Bond/LUTs : It is learnt that some field officers have inferred that the instructions given by the said circulars are effective in respect of exports made only from the date of its issue despite the fact that it has been categorically clarified specifically in the said circular (dated 7th July, 2017) that the instructions shall be applicable for exports on or after 1st July, 2017. It is reiterated that the instructions issued vide said circular and instant Circular [Board Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X
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