Small exporters have brought to the notice of the Government the difficulties in furnishing bond with requisite bank guarantee. 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 relevant notification for this shall be issued in due course.
The issue of cash blockage is expected to be partially addressed by this measure.
We have to wait for the Notification to get clarity on the following-
1. What about those smaller exporters who has already supplied Bank Grantees? Will they be allowed to withdraw Bank Guarantees and Submit Letter of Undertaking?
2. Why even the Letter of Undertaking is required to be submitted when Export is suppose to be Zero Rated Supply?
3. When will those smaller exporters will get refund of GST Paid on Export due to inability to submit Bond in time?
Tweet from Ministry of Finance (@FinMinIndia ) on 30.09.2017 ob above
Facility of furnishing Letter of Undertaking extended to more exporters;
To facilitate exports under GST, it has been decided to allow exporters the facility of furnishing Letter of Undertaking in place of a bond.
This facility of furnishing Letter of Undertaking, in place of a bond, is allowed to exporters for exporting goods or services or both.
Now no bank guarantee will be required.The relevant notification for this will be issued in due course.
This decision is taken in response to difficulties brought to notice of Govt. by Small Exporters in furnishing bond with bank guarantee.
Issue of cash blockage in case of Exporters is expected to be partially addressed by this measure.More measures are under consideration.
