GST: Govt to Exempt Small Exporters from Furnishing Bank Guarantee

The Finance Ministry, on Friday said that small exporters are not required to furnish bank guarantee for shipping goods and services.

The decision comes a day after exporters met Finance Minister Arun Jaitley for resolution of GST-related problems to boost overseas shipments.

Under the new Goods and Services Tax (GST) regime, an exporter can get exemption from payment of IGST if he submits bonds or Letter of Undertaking (LUTs).

The finance ministry in a statement released last day said that small exporters have brought to the notice of the government the difficulties in furnishing bond with requisite bank guarantee.

However, no notification or circular has not been issued in this regard.

“To facilitate exports under GST, it has been decided that the facility of furnishing Letter of Undertaking, in place of a bond, for exporting goods or services or both shall be allowed to exporters and no bank guarantee will be required,” the statement said.

“The issue of cash blockage is expected to be partially addressed by this measure. More measures are under consideration,” the ministry said.

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