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CHEMEXCIL
Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)
Jhansi Castle, 4th Floor, 7 Cooperage Road, Mumbai - 400 001.India.
Tel : +91 22 22021288 / * Fax : +91 22 22026684
* E-mail : info@chemexcil.gov.in Web : https://chemexcil.in
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EPC/LIC/LUT_BOND
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5th October 2017
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ALL MEMBERS OF THE COUNCIL
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GST : Facility of furnishing Letter of Undertaking extended to more exporters/ Clarifications
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Dear Members,
As you are aware, in recent times the criteria for LUT or Bond with BG has been relaxed with acceptance of RCMC with Bond. However, MSME exporters have still reported issues due to difference in interpretation by local GST Offices and difficulties faced.
Taking cognizance of these issues, CBEC has issued Notification No. 37/2017 – Central Tax dated 4th October, 2017 which extends the facility of LUT to all exporters under rule 96A of the CGST Rules 2017, subject to certain conditions and safeguards.
Along-with this notification, Master Circular No. 8/8/2017-GST dated 4th October 2017 has also been issued providing updated clarifications on Bond/ LUT application modalities, applicability on payments in INR, self-sealing, Transactions with EOU, CT1 etc. This master circular actually sums up all the recent clarification issued by CBEC/ GST Policy Wing.
As per Notification No. 37 /2017 – Central Tax dated 4th October, 2017, following conditions and safeguards are specified for furnishing a Letter of Undertaking in place of a Bond by a registered person who intends to supply goods or services for export without payment of integrated tax –
(i) All registered persons who intend to supply goods or services for export without payment of integrated tax shall be eligible to furnish a Letter of Undertaking in place of a bond except those who have been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 or the Integrated Goods and Services Tax Act, 2017 or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees.
(ii) The Letter of Undertaking shall be furnished on the letter head of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor;
(iii) Where the registered person fails to pay the tax due along with interest, the facility of export without payment of integrated tax will be deemed to have been withdrawn and if the amount mentioned in the said sub-rule is paid, the facility of export without payment of integrated tax shall be restored.
(iv) The provisions of this notification shall also apply in respect of zero-rated supply of goods or services or both made by a registered person (including a Special Economic Zone developer or Special Economic Zone unit) to a Special Economic Zone developer or Special Economic Zone unit without payment of integrated tax.
Relevant members (specially MSME’s) are requested to take note of above points in the Notification No. 37 /2017 and do the needful.
For updated clarifications on Bond/ LUT application modalities, applicability on payments in INR, self-sealing, Transactions with EOU, CT1 please also refer to Master Circular No. 8/8/2017-GST dated 4th October 2017.
For full details of above said Notification and Master circular, respectively, please use below links to download directly from CBEC portal-
http://cbec.gov.in/resources//htdocs-cbec/gst/Final_Master_circular_LUT_Bond_04102017.pdf
http://cbec.gov.in/resources//htdocs-cbec/gst/notfctn-37-central-tax-english.pdf
In our view, above notifications/ clarifications should resolve the existing issues related to Bond, LUT etc. However, if any difficulty is still faced by the members, they may revert to us ondeepak.gupta@chemexcil.gov.in and balani.lic@chemexcil.gov.in .
Thanking you.
Yours faithfully,
S.G BHARADI
EXECUTIVE DIRECTOR
CHEMEXCIL
Encl:- as above.
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