Page 67 - Chemexcil NEWS August - September 2017 for web

or Bhutan”. Accordingly, it is clarified that acceptance of LUT instead of a bond for supplies of
goods to 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 applicable RBI guidelines. It may also be noted that supply of services to SEZ
developer or SEZ unit 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.

g. Bank Guarantee:

Circular No. 4/4/2017 dated 7th July, 2017 provides that bank guarantee should normally not exceed
15% of the bond amount. However, the Commissioner may waive off the requirement to furnish
bank guarantee taking into account the facts and circumstances of each case. It is expected that this
provision would be implemented liberally. Some of the instances of liberal interpretation are as
follows:

• RCMC: An exporter registered with recognized Export Promotion Council can be allowed to
submit bond without bank guarantee on submission of a self-attested copy of the proof of
registration with a recognized Export Promotion Council.

• 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 accounting 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, maybe Rs. 1 crore or more and it
also maybe 10% or more of total export turnover. In such cases, the registered person can be
allowed to submit bond without bank guarantee.

h. Jurisdictional officer:

It has been clarified in Circular Nos. 2/2/2017 – GST dated 4th July, 2017 and 4/4/2017 – GST dated
7th July, 2017 that Bond/LUT shall be accepted by the jurisdictional Deputy/Assistant Commissioner
having jurisdiction over the principal place of business of the exporter. The exporter is at liberty
to furnish the bond/LUT before Central Tax Authority or State Tax Authority till the administrative
mechanism for assigning of taxpayers to respective authority is implemented. It is reiterated that
the Central Tax officers shall facilitate all exporters whether or not the exporter was registered with
the Central Government in the earlier regime.

i. Documents for LUT:

Documents submitted as proof of fulfilling the conditions of LUT shall be accepted unless there is
any evidence to the contrary. Self-declaration shall be accepted unless there is specific information
otherwise. For example, a self-declaration by the exporter to the effect that he has not been
prosecuted should suffice for the purposes of notification No.16/2017 - Central tax dated 7th July,
2017. Verification, if any, may be done on post facto basis. Similarly, Status holder exporters have
been given the facility of LUT under the said notification and a self-attested copy of the proof of

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