Exports under LUT
April 4, 2018
Members of the Council,
Sub : Exports under LUT
As you are aware, exporters have the option of Paying applicable Integrated GST (IGST) on export products (on which refund of IGST is applicable) or Go for zero rated exports option (wherein products are exported without payment of GST by submitting Letter of Undertaking – LUT) and then claim refund of GST paid on inputs i.e. refund of GST Input Tax Credit.
As per CGST Circular No. 8/8/2017 dated Oct. 4, 2017 (copy enclosed), the LUT shall be valid for the whole financial year in which it is tendered. Hence, members exporting under LUT may apply for fresh LUT for the year 2018-19, with the concerned GST jurisdictional office . Our earlier circular dated Oct. 6, 2017on exports under Bond/LUT is given below for reference please.
Thanks and regards
October 6, 2017
Members of the Council,
Sub : Exports under Bond/ LUT
As you are aware, exports without payment of applicable IGST are now allowed on the basis of submission of Bond or Letter of Undertaking (LUT). The Central Board of Excise & Customs has now issued a Notification No.37/2017-Central Tax dated 4th Oct 2017 and Circular No.8/82017-GST dated 4th Oct 2017 making amendments with regard to procedure in furnishing Bond/LUT. The details are given below.
|Existing Condition||Amendments made|
|LUT is required to be furnished by the following categories of exporters.|
a. a status holder (one star to five star export houses) as specified in paragraph 5 of the Foreign Trade Policy 2015-2020; or
b. who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year.
|All registered persons who intend to supply goods or services for export 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 (12 of 2017) or the Integrated Goods and Services Tax Act, 2017 (13 of 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;|
|Bond was earlier required to be furnished by categories of exporters other than those mentioned above. However 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.||Bond is now required to be given only by exporters prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or the Integrated Goods and Services Tax Act, 2017 (13 of 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;|
Members may also kindly note the below points.
- 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 (already circulated by CLE to members)
- The LUT shall be valid for the whole financial year in which it is tendered. However, in case the goods are not exported within the time specified in sub-rule (1) of rule 96A of the CGST Rules and the registered person fails to pay the amount mentioned in the said sub-rule, the facility of export under LUT will be deemed to have been withdrawn.
- Till the time FORM GST RFD-11 is available on the common portal, the registered person (exporters) may download the FORM GST RFD-11 from the website of the CBEC (cbec.gov.in) and furnish the duly filled form to the jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business. The LUT shall be furnished on the letter head of the registered person, in duplicate, and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorized by such working partner or Board of Directors of such company or proprietor.
The aforesaid GST notification and circular are enclosed herewith.
Thanks and regards