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mentioned therein. So, in accordance with Foreign Trade Policy. Earlier we used to clear
Section 16 (1) of the said Act, your supplies goods without excise duty payment under
are zero rated. You can export the services on notification no. 108/95-CE dated August
payment of IGST and claim refund, or you can 28, 1995. Can we supply our goods without
export the services without payment of IGST payment of GST?
after furnishing bond or letter of undertaking.
I suggest you see the CBEC Circulars no. No. Section 2(39) of the CGST Act, 2017
26/2017-Cus dated July 1, 2017, 2/2/2017-GST defines “deemed exports” as such supplies
dated July 4, 2017 and 4/4/2017-GST dated of goods as may be notified under section
July 7, 2017. 147, but no notification has been issued so far.
Q. We are manufacturers. We supply to projects (Source:- http://www.business-standard.com/article/economy-
funded by international agencies that are policy/igst-on-high-seas-sale-of-imports-is-levied-only-during-
recognised as deemed exports under the customs-clearance-117081400745_1.html dated 14th August
2017)
9. GST: MORE CLARIFICATIONS FROM CBEC ON LETTER OF
UNDERTAKING FOR EXPORTS
The Central Board of Excise and Customs had Procurements by merchant exporters under
issued circulars 2/2/2017-GST and 4/4/2017- form CT 1: The facility of procurement of goods
GST to clarify the issues relating to furnishing without payment of excise duty under form CT 1
of bonds/letter of undertaking (LUT) for exports by merchant exporters is no longer available. The
without payment of IGST. Considering the large merchant exporters have to procure the goods on
number of representations, the CBEC issued cir- payment of GST.
cular 5/5/2017-GST on August 11, 2017, clarifying
as follows: Supplies to export oriented units: Supplies to
EOUs do not enjoy any benefit of zero rating and
Eligibility to export under LUT: Any registered are subject to tax similar to any other taxable
person, who has received a minimum foreign supply.
exchange inward remittance of 10 percent of
export turnover in the preceding financial year Acceptance of LUT in case of payment in Indian
is eligible for submitting LUT, provided that the Rupees for supplies made to Nepal, Bhutan,
amount of foreign inward remittance should be and special economic zones: Acceptance of LUT
minimum Rs 1 crore. A status holder as specified instead of a bond for supplies of goods to Nepal
in paragraph 3.20 and 3.21 of the Foreign Trade or Bhutan or SEZ developer or SEZ unit will be
Policy 2015-2020 can submit an LUT. permissible irrespective of whether the payments
are made in Indian currency or convertible foreign
Form for submission of bond/LUT: Bonds are exchange as long as they are in accordance with
furnished on non-judicial stamp paper, while LUTs applicable Reserve Bank of India guidelines.
are generally submitted on a letterhead containing However, the supply of services to Nepal or
signature and seal of the authorised person. Bhutan will be deemed to be an export of services
only if payment for such services is received in
Time for acceptance of bond/LUT: The bond/LUT convertible foreign exchange.
should be accepted by the authorities within a
period of three working days from the date of Submission of bank guarantee along with bond:
submission of bond/LUT along with complete Circular 4/4/2017 provided that in the case of
documentation. submission of a bond, the bank guarantee
should not normally exceed 15 percent of the
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