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TMI BlogClarification on issues related to furnishing of Bond/Letter of Undertaking for exports 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, 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 11 th August, 2017 - reg. Attention of all Importers/ Exporters/ Customs Brokers and the Members of the Trade is drawn to Circular No. 8/8/2017 - GST under F. No. 349/74/2017- GST (Pt.) Vol.-II, dated 04.10.2017 issued by the Commissioner (GST), Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, New Delhi. 2. In this context, it is bring to your notice that 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 4 th October, 2017 has been issued which extends the facility of LUT to all exporters under rule 96A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of export under LUT to status holder as specified in paragraph 5 of the Foreign Trade Policy 2015-2020 and to persons receiving a minimum foreign inward remittance of 10% of the export turnover in the preceding financial year which was not less than Rs. one crore. b) Validity of LUT : The LUT shall 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 (l) 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fails to pay the amount mentioned in the said sub-rule, the facility of export under LUT will be deemed to have been withdrawn.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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for acceptance of LUT/Bond ; As LUT/Bond is a priori requirement for export, including exports to a SEZ developer or a SEZ unit, the LUT/bond should be processed on top most priority. It is clarified that LUT/bond should be accepted within a period of three working days of its receipt along with the self-declaration, as stated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion between a manufacturer and a merchant exporter is in the nature of supply and the same would be subject to GST. j) Transactions with EOUs: Zero rating is not applicable to supplies to EOUs and there is no special dispensation for them under GST regime. Therefore, 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-I of RBI Master Circular No. 14/2015-16 dated 01 st July, 2015 (updated as on 05 th November, 2015), which states that there is no restriction on invoicing of export contracts in Indian Rupees in terms of the Rules, Regulations, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal place of business of the exporter. The exporter is at liberty to furnish the LUT/bond before either the Central Tax Authority or the State Tax Authority till the administrative mechanism for assigning of taxpayers to the respective authority is implemented. 4. Circular No. 22/2017 - GST dated 5 th July, 2017, Circular No. 4/4/2017 - GST dated 7 th July, 2017 and Circular No. 5/5/2017 GST dated 11 th August, 2017 are hereby rescinded except as respects things already done or omitted to be done. 5. The circular may be downloaded from the website www.cbec.gov.in. 6. Difficulties, if any, may be brought to the notice of the undersigned. (M. V. S. CHOUDHARY) COMMISSIONER CUSTOMS, PUNE - Circular - Trade No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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