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TMI BlogClarification on issues related to furnishing of Bond/Letter of Undertaking for exportsX X X X Extracts X X X X X X X X Extracts X X X X ..... 7-GST, dated 04.10.2017 for the clarification on issues related to furnishing of Bond/Letter of Undertaking for exports. 2. In view of the difficulties being faced by the exporters in submission of bonds/Letter of Undertaking (LUT for short) for exporting goods or services or both without payment of integrated tax, Notification No. 37/2017 - Central Tax dated October, 2017 has been issued which extends the facility' of LUT to all exporters under rule 96A of the Central Goods and Services Tax Rules, 2017 (hereafter referred to as "the CGST Rules") subject to certain conditions and safeguards. This notification has been issued in supersession of Notification No. 16/2017 - Central Tax dated 7th July, 2017 except as respects things done or omi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be valid for the whole financial year in which it is tendered. However, in case the goods are not exported within the time specified in sub-rule (1) of rule 96A of the CGST Rules and the registered person fails to pay the amount mentioned in the said sub-rule, the facility of export under LUT will be deemed to have been withdrawn. If the amount mentioned in the said sub-rule is paid subsequently, the facility of export under LUT shall be restored. As a result, exports, during the period from when the facility to export under LUT is withdrawn till the time the same is restored, shall be either on payment of the applicable integrated tax or under bond with bank guarantee. c) Form for bond/LUT: Till the time FORM GST RFD-11 is available o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in para 2(d) above by the exporter. If the LUT I bond is not accepted thin a period of three working days from the date of submission, it shall deemed to be accepted. f) Bank guarantee: Since the facility of export under LUT has been extended to all registered persons, bond will be required to be furnished by those persons who have been prosecuted for cases involving an amount exceeding Rupees two hundred and fifty lakhs. A bond, in all cases, shall be accompanied by a bank guarantee of 15% of the bond amount. g) Clarification regarding running bond: The exporters shall furnish a running bond where the bond amount would cover the amount of self-assessed estimated tax liability on the export. The exporter shall ensure that the outstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of exports, are eligible for zero rating like any other exporter. k) Realization of export proceeds in Indian Rupee: Attention is invited to para A (y) Part-J of RBI Master Circular No. 14/2015-16 dated 01st July, 2015 (updated as on 05th November, 2015), which states that "there is no restriction on invoking of export con tracts in Indian Rupees in terms of the Rules, Regulation, 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), all export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency However, export proceeds a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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