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TMI BlogSubject: Clarification on issues related to furnishing of Bond/Letter of Undertaking for Exports–reg.X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 2017, Circular No. 2/2/2017 GST dated 5th July, 2017 and Circular No. 4/4/2017 GST dated 7th July, 2017 on the above mentioned subject. It is noticed that there is some confusion regarding furnishing of Bond/Letter of Undertaking for Exports. Accordingly, for the purpose of uniformity in the implementation, following issues are being clarified hereunder :- a. Eligibility to export under LUT : Notification No. 16/2017 Central Tax dated 7th July, 2017 specifies conditions to be fulfilled for export under Letter of Undertaking (LUT) in place of bond. In the extant Central Excise provisions, LUTs were limited to manufacturer exporters only. The intent of the said notification is to liberalize the facility of LUT and extend it to al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 whether he satisfies the above conditions. b. Form for LUT : Bonds are furnished on non-judicial stamp paper, while LUTs are generally submitted on the letterhead containing signature and seal of the person or the person authorized i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies 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), 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 against specific exports may al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 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 and accountal of receipts and turnover across different registered person with the same PAN. But the total amount of inward foreign remittances received by all the registered persons, having one Permanent Account Number, may be ₹ 1 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licability 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 this circular are applicable to any export made on or after the 1st of July 2017. ( Dr. M. Subramanyam ) COMMISSIONER - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India - taxmanagementindia - taxmanagement - taxma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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