The Central Board of Excise and Customs (CBEC) on Friday issued clarifications on issues related to furnishing of Bond/Letter of Undertaking for Exports.
The circular stated that the Notification dated 7.07.2017 prescribing conditions to be fulfilled for export under Letter of Undertaking (LUT) in place of bond is to liberalize the facility of LUT and extend it to all kind of suppliers. “It is hereby clarified that any registered person who has received a minimum foreign inward remittance of 10% of export turnover in the preceding financial year is eligible for availing the facility of LUT provided that the amount received as foreign inward remittance is not less than Rs. one crore.”
This means that only such exporters are eligible to LUT facilities who have received a remittance of Rs. one crore or 10% of export turnover, whichever is a higher amount, in the previous financial year.
It further said that LUT/bond, which is a priori requirement for export, including supplies to a SEZ developer or a SEZ unit, it should be processed on top most priority and should be accepted within a period of three working days from the date of submission of LUT/bond along with complete documents by the exporter.
With regard to transactions with EOUs, it clarified that “Zero rating is not applicable to supplies to EOUs and there is no special dispensation for them. Therefore, supplies to EOUs are taxable under GST just like any other taxable supplies. The EOUs, to the extent of exports, are eligible for zero rating like any other exporter.”
Before concluding it added that “It is learnt that some field officers have inferred that the instructions given by the said circulars are effective in respect of exports made only from the date of its issue despite the fact that it has been categorically clarified specifically in the said circular (dated 7th July, 2017) that the instructions shall be applicable for exports on or after 1st July, 2017. It is reiterated that the instructions issued vide said circular and this circular are applicable to any export made on or after the 1st July 2017.”
Read the Full Text of the Circular Below