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Dear Members,   We would like to inform you that the GST Policy Wing, Central Board of Indirect Taxes and Customs (CBIC)  has issued Circular No. 88/07/2019-GST dated the 1st February, 2019  regarding  Changes in Circulars issued earlier under the CGST Act, 2017 – Reg.   As per the above GST Policy Wing circular,   several circulars issued earlier under the CGST Act, 2017 are hereby amended with effect from 01.02.2019.      From exports perspective,    Circular No. 8/8/2017 dated 04.10.2017 (Para 2K)  pertains to  Realization of export proceeds in Indian Rupee.   For the  convenience of the members, the relevant portions of Circular No. 8/8/2017 dated 04.10.2017 are reproduced/ highlighted as follows:   Circular No. 8/8/2017 dated 04.10.2017 The circular is revised in view of the amendment carried out in section 2(6) of the IGST Act, 2017 vide section 2 of the IGST (Amendment) Act, 2018 allowing realization of export proceeds in INR, wherever allowed by the RBI. Accordingly, the original and the amended relevant para of the circular are detailed hereunder. Original Para 2(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 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 rupees but export proceeds shall be realized in freely convertible currency. However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non-resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan”. Accordingly, it is clarified that the acceptance of LUT for supplies of goods to countries outside India Nepal or Bhutan or SEZ developer or SEZ unit will be permissible irrespective of whether the payments are made in Indian currency or convertible foreign exchange as long as they are in accordance with the applicable RBI guidelines. It may also be noted that the supply of services to SEZ developer or SEZ unit under LUT will also be permissible on the same lines. The supply of services, however, to Nepal or Bhutan will be deemed to be export of services only if the payment for such services is received by the supplier in convertible foreign exchange. Amended Para 2(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 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 rupees but export proceeds shall be realized in freely convertible currency. However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non-resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan”. Further, attention is invited to the amendment to section 2(6) of the IGST Act, 2017 which allows realization of export proceeds of services in INR, wherever allowed by the RBI. Accordingly, it is clarified that the acceptance of LUT for supplies of goods or services to countries outside India or SEZ developer or SEZ unit will be permissible irrespective of whether the payments are made in Indian currency or convertible foreign exchange as long as they are in accordance with the applicable RBI guidelines.   Members  may take note of the above changes in circular (Para) related to  Realization of export proceeds in Indian Rupee.   For details of changes in other circulars (regarding job work, registration   etc),  members  may use  below link for reference/ download-   Circulars/Orders   88/2019 View(475 KB) 01-02-2019 Seeks to make amendments in the earlier issued circulars in wake of amendments in the CGST Act, 2017 (which shall come into force w.e.f. 01.02.2019).     http://cbic.gov.in/htdocs-cbec/gst/circular-cgst-88.pdf   Your feed-back, if any,  on these changes  may sent to the council on  ed@chemexcil.gov.in & deepak.gupta@chemexcil.gov.in .   Thanking You, Yours faithfully,   (S. G. BHARADI) EXECUTIVE DIRECTOR CHEMEXCIL