Filing of bond under GST NOT required anymore
by Paras Mehra 3.25K
Here comes a big relief for all the exporters under GST as the government has done away with the requirement of filing the bond under GST. Now, every exporter shall need to file the LUT i.e. letter of Undertaking for doing exports.
Earlier, the every exporter whose previous year foreign receipts were less than 1 crore is required to file the bond along with a 15% bank guarantee. However, many exporters were finding it difficult to comply with the provision and hence, the government provided them with the relief that they don’t require to file the bond anymore.
Filing of LUT in place of Bond
As per the notification issued by the central government, all registered taxable person who intend to supply goods or services for export without payment of IGST, shall be required to file the LUT in place of bond.
However, that person who has been prosecuted for any offense under the CGST or IGST or any existing law in force where tax evaded is more than Rs.2.5 crore shall continue to file bond.
No filing of bond for SEZ also
The government has also extended the benefit of filing the LUT in place of bond for SEZ units as well. In other words, if you are supplying to SEZ units, then those are treated as zero-rated supply and hence only LUT is required to be filed them in place of the bond.
LUT should be on letterhead
The letter of undertaking (LUT) shall be furnished on the letter head of the registered person in duplicate for the financial year in the annexure to form RFD – 11 and it shall be executed by the working partner, director or the company secretary or the proprietor or by a person duly authorised by such working partner or board of directors of such company or proprietor.
Conclusion
Since the inception of GST, many exporters were finding it difficult to work under GST. Further, filings of bond along with bank guarantee were causing them harm. Hence, removing the requirement of filing bond under GST is a big relief for exporters across the country. To file the LUT for exports, please email us at info@hubco.in.