Circular no-05/2017-F. No. 349/82/2017-GST-Circular on Bond/LUT in case of exports without payment of integrated tax

Circular No. 5/5/2017 – GST

F. No. 349/82/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
GST Policy Wing

New Delhi, Dated the 11th August, 2017


The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All)

The Principal Director Generals/ Director Generals (All)

Subject: Clarification on issues related to furnishing of Bond/Letter of Undertaking for

Exports–Reg.Please refer to Notification No. 16/2017 – GST dated 7th July, 2017 and Circular No.2/2/2017 – GST dated 5th July, 2017 and Circular No. 4/4/2017 – GST dated 7th July, 2017. A large
number of communications have been received from the field formations andexporters citingvariation in the interpretation of above referred notification and circulars.

2. Therefore, in exercise of powers conferred under section 168 (1) of the Central Goods andServices Tax Act, 2017, for the purpose of uniformity in the implementation of the Act, followingissues are being clarified hereunder:

a. Eligibility to export under LUT: Notification No. 16/2017 – Central Tax dated 7th July,2017 specifies conditions to be fulfilled for export under Letter of Undertaking (LUT) in place ofbond. In the extant Central Excise provisions, LUTs were limited to manufacturer exporters only.The intent of the said notification 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 foreigninward remittance of 10% of export turnover in the preceding financial year is eligible for availingthe 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 receiveda remittance of Rs. one crore or 10% of export turnover, whichever is a higher amount, in theprevious financial year. A few illustrations are as follows:


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