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 ..... 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 4th 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 omitted to be done before such supersession. 2. In the light of the new notification, three circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered. 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fails to pay the amount mentioned in the said sub-rule, the facility of export under LUT will be deemed to have been withdrawn.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 As a result, exports, during the period from when the facility to export under LUT is withdrawn till the time the same is restored, shall be either on payment of the applicable integrated tax or under bond with bank guarantee.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-II is available on the common portal, the registered person (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in para 2(d) above by the exporter. If the LUT / bond is not accepted within 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 exporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, supplies to EOUs are taxable like any other taxable supplies. EOUs, to the extent 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 (v) Part of RBI Master Circular No. 14/2015-16 dated 01stJuly, 2015 (updated as on 05th November, 2015), which states that 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), all export contracts and invoices shall be denominated either in freely convertible currency or Indian rupee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mented. 3. Circular No. 2/2/2017 - GST dated 5th July, 2017, Circular No. 4/4/2017 - GST dated 7th July, 2017 and Circular No. 5/5/2017 - GST dated 11th August, 2017 are hereby rescinded except as respects things already done or omitted to be done. 4. All the members of the Regional Advisory Committee and Trade Associations, Chambers of Commerce in the State of Telangana are requested to circulate this Trade Notice among their constituent members for information. (NARESH PENUMAKA) Principal Commissioner - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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