Clarification on issues related to furnishing of Bond/Letter of Undertaking for Exports
NO. CLE/POLICY/GST /2017
August 16, 2017
Members of the Council,
Sub: Clarification on issues related to furnishing of Bond/Letter of Undertaking for Exports.
The Central Board of Excise and Customs has issued a Circular No.5/5/2017-GST dated 11/8/17 on the above subject. The circular states the following.
a. 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.
b. It may however be noted that a status holder as specified in paragraphs 3.20 and 3.21 of the Foreign Trade Policy 2015-2020 is eligible for LUT facility regardless of whether he satisfies the above conditions.
c. Bonds are furnished on non-judicial stamp paper, while LUTs are generally submitted on the letterhead containing signature and seal of the person or the person authorized in this behalf as provided in said Notification.
d. As LUT/bond is a prior requirement for export, including supplies to a SEZ developer or a SEZ unit, the LUT/bond 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.
e. 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.
Members may kind note the above.
Thanks and regards
COUNCIL FOR LEATHER EXPORTS