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TMI BlogClarification/Guidelines regarding submission of Bond/Letter of Undertaking (LUT) by the Exporters in respect of Exports without payment of Integrated Tax under WBGST/ CGST Rule 96A.X X X X Extracts X X X X X X X X Extracts X X X X ..... ing procedure to be followed for export of goods and services under the GST regime. This issue is examined in detail. (1) Section 16(3) of the IGST Act, 2017 provides that a registered person making Zero Rated supply is eligible to claim refund of unutilised input tax credit in case he supplies goods or services or both under bond or Letter of Undertaking (herein after referred to as LUT ), subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax. Alternatively, he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the West Bengal Goods and Services Tax Ordinance 2017 and the rules made there under (2) In accordance with the provisions of rule 96A of West Bengal Goods and Services Tax (Third Amendment) Rules, 2017 a registered person availing of the option of supplying goods or service for export without payment of Integrated Tax is required to furnish, prior to export, a Bond or a LUT in Form GST RFD- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bond would cover the amount of tax involved in the export based on estimated tax liability as assessed by the exporter himself. The exporter shall ensure that the outstanding tax liability on exports is within the Bond amount. In case the Bond amount is insufficient to cover the tax liability in yet to be completed exports, the exporter shall furnish a fresh Bond to cover such liability. (e) Further, FORM RFD-11 under rule 96A of the West Bengal Goods and Services Tax (Third Amendment) Rules, 2017 requires furnishing a bank guarantee with bond. It is pointed out here that the Commissioner may decide on the amount of Bank Guarantee not exceeding 15% of the Bond amount, depending upon the track record of the exporter. However, if the Commissioner is satisfied with the track record of an exporter, he may dispense with this requirement of furnishing of bank guarantee with bond. (f) As regards LUT, it is also clarified that the LUT shall be valid for a period of twelve months. If the exporter fails to comply with the conditions of the LUT he may be asked to furnish a bond. (g) Further, in exercise of the powers conferred by section 168 of the West Bengal Goods and Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears, as indicated in paragraph 3.21 of Foreign Trade Policy . The export performance will be counted on the basis of FOB value of export earnings in free foreign exchange. (c) For deemed export, FOR value of exports in Indian Rupees shall be converted in US$ at the exchange rate notified by CBEC, as applicable on 1st April of each Financial Year. (d) For granting status, export performance is necessary in at least two out of three years. 3.21 Status Category: Status Category Export Performance FOB / FOR (as converted) Value (in US $ million) One Star Export House 3 Two Star Export House 25 Three Star Export House 100 Four Star Export House 500 Five Star Export House 2000 [Extract from FOREIGN TRADE POLICY (1st April, 2015 31st March, 2020, Department of Commerce, Ministry of Commerce and Industry, Government of India] FORM GST RFD-11 (See rule 96A) Furnishing of bond or Letter of Undertaking for export of goods or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligor has furnished such guarantee by depositing with the Commissioner the bank guarantee as afore mentioned; The condition of this bond is that the obligor and his representative observe all the provisions of the Act in respect of export of goods or services, and rules made thereunder; AND if the relevant and specific goods or services are duly exported; AND if all dues of Integrated tax and all other lawful charges, are duly paid to the Government along with interest, if any, within fifteen days of the date of demand thereof being made in writing by the said officer, this obligation shall be void; OTHERWISE and on breach or failure in the performance of any part of this condition, the same shall be in full force and virtue: AND the President shall, at his option, be competent to make good all the loss and damages, from the amount of bank guarantee or by endorsing his rights under the above-written bond or both; I/We further declare that this bond is given under the orders of the Government for the performance of an act in which the public are interested; IN THE WITNESS THEREOF these presents have been signed the day hereinbefore written by the obligor(s). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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