Export Procedure Under GST REGIME - A HUGE RELIEF TO EXPORTERS

#CHA

Exports under Bond/Letter of Undertaking

"RULE 96A. Refund of integrated tax paid on export of goods or Services under bond or Letter of Undertaking. - (1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of -

(a)		fifteen days after the expiry of three months [or such further period as may be allowed by the Commissioner] from the date of issue of the invoice for export, if the goods are not exported out of India; or
(b)		fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.………."

In this regard, Board has also issued Notification No. 37/2017 - Central Tax dated 4th October, 2017 specifying the related conditions and safeguards 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 as under;

(i)		Exporters 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;
(iii)		Where the registered person fails to pay the tax due along with interest, within the prescribed period, the facility of export without payment of integrated tax will be deemed to have been withdrawn.

Furthermore, in order to promote consistency and uniformity in the trade, Board, vide Circular No. 8/8/2017-GST dated 4th October, 2017, has clarified that exporters shall furnish the duly filled up FORM GST RFD-11 to the jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business. It is also clarified that the LUT shall be furnished on the letter head of the registered person in duplicate along with self-declaration to the effect that the conditions of LUT have been fulfilled. Accordingly, it has been prescribed that the LUT shall be accepted unless there is specific information otherwise.

Procedural Bottlenecks

 The exporters have been facing grave difficulties in submitting LUT with the jurisdictional officers having jurisdiction over their principal place of business. It has been observed that procedures to submit LUT manually to the jurisdictional officer have become a matter of great difficulty and are fraught with complexities, since humongous documents are being insisted upon by the department making a complete departure from the intended policy of the government. It is seen that the following documents are being asked for by the field formations for submission physically along with the LUT:

♦		Covering letter requesting acceptance of LUT,
♦		Copy of GST Registration Certificate,
♦		GST FORM RFD-11- in duplicate,
♦		Annexure- Letter of Undertaking (LUT)- in duplicate,
♦		Identity proof of witnesses signing on LUT,
♦		Self-Declaration on letter-head that the entity has not been prosecuted for any offence under GST Act, or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees,
♦		Incorporation documents of the entity,
♦		Identity Proof of Director/Partner/Proprietor, signing the documents,
♦		Copy of Trade Licence of the entity,
♦		Copy of IEC code, etc.

Bold Step Forward

At this juncture it is inspiring to note that the Board has acted rapidly and in order to resolve the matter, issued Circular No. 40/14/2018 - GST dated 06.04.2018 addressing certain issues relating to furnishing of Bond/LUT giving substantial relief to the export community. Accordingly, in partial modification of Circular No. 8/8/2017-GST dated 4th October, 2017, sub-paras (c), (d) and (e) of para 2 of the said Circular are modified as follows:

♦		An LUT shall be deemed to be accepted as soon as an acknowledgement for the same bearing the Application Reference Number (ARN) is generated online.
♦		No document needs to be physically submitted to the jurisdictional office for acceptance of LUT.
♦		If it is discovered that an exporter whose LUT has been so accepted was ineligible to furnish an LUT in place of bond as per Notification No. 37/2017-Central Tax, then the exporter's LUT will be liable for rejection.

Thus, the execution of LUT has again been made plain and simple by mandating that the online submission of LUT shall suffice to be considered as acceptance of LUT in case an acknowledgement for the same, bearing the ARN, is generated online. There is no requirement of physical submission of the same to the jurisdictional office. This is not only a bold initiative by the government but a true reflection of its intent of making the administration free of regulatory bottlenecks.

Government trying to boost export to reduce the trade deficit . Center also given instruction to  states to ensure smooth movement of cargo to ICD / Port / Airports. Focus on Logistics to boost exports will also increase in employment in this sector. Logistics in India is a  wide sector and to boost export logistics sector need to be improved along with simplification of procedure and policies.  

#CUSTOMHOUSEAGENT
#Logistics in India