TMI BlogLetter of undertaking, Bond & Bank GuaranteeX X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner manually in the above said format till the module for furnishing of FORM RFD-Il is available on the common portal (www.gst.gov.in). (Circular no. 2/2/17 dated 04.07.2017). 2(A) LETTER OF UNDERTAKING: 2(A) (i) Notification No. 16/2017-Central Tax dated 07.07.2017 specify the eligibility of registered person for submission of Letter of Undertaking in place of a bond, as:- (a) a status holder as specified in paragraph 3.20 3.21 of the Foreign Trade Policy 2015-2020; or (b) who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year, AND he has not been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws in case where the amount of tax evaded exceeds two hundred and fifty lakh rupees. 2(A) (ii) As regards LUT, it is clarified that it shall be valid for twelve months. If the exporter fails to comply with the conditions of the LUT he may be asked to furnish a bond. (referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver of ₹ 40 crore. 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. e. 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. 2(A) (v) Documents for LUT: Documents submitted as proof of fulfilling the conditions of LUT shall be accepted unless there is any evidence to the contrary. Self-declaration shall be accepted unless there is specific information otherwise. For example, a self-declaration by the exporter to the effect that he has not been prosecuted should suffice for the purposes of notification No. 16/2017 - Central tax dated 7th July, 2017. 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. (Referred to Circular No. 51512017 dated 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide about the amount of bank guarantee depending upon the track record of the exporter. If Commissioner is satisfied with the track record of an exporter then furnishing of bond without bank guarantee would suffice. In any case the bank guarantee should normally not exceed 15% of the bond amount. (referred to Circular No. 4/4/2017 dated 07.07.2017). 2(B) (iv) The discretionary power has been given to the Commissioner so that he/she can use this power depending upon the individual cases of the exporter. The intent is to allow use of this power liberally. Some of the instances of liberal interpretation are as follows: a. 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. b. 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 regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for them. Supplies to EOUs are taxable under GST just like any other taxable supplies. EOUs, to the extent of exports, are eligible for zero rating like any other exporter. (Referred to Circular No. 5/5/2017 dated 11.08.2017 and also referred in Annexure to Letter F. No. 354/173/2014-TRU (GST cell) Pt. Il dated 26th July. 2017). 6. Forward inward remittance in Indian Rupee: Rule 96A (6) of CGST Rules, 2017 provides that the supplies to SEZ unit or developer shall have same treatment as given to exports. This sub-rule also provides that the provision of Rule 96A (I) shall be applicable, mutatis mutandis. It has been learnt that sale proceeds from supplies to Nepal, Bhutan and SEZ units or SEZ developer are not received in convertible currency so the eligibility condition for furnishing of LUT can never be satisfied in cases of such supplies. 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 Managemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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