Process eased for exporters who have not paid IGST

The Centre has, through a notification and a circular, eased the paperwork required to export goods without the exporter having paid the Integrated Goods and Services Tax (IGST).

According to the GST Rules, traders who wanted to export without paying IGST had to provide a bond or letter of undertaking (LUT) promising to pay the tax. This requirement did not clarify who exactly needed to provide a bond and who was eligible to provide a LUT. It also involved complexity to do with the recipient of these documents.

The notification and circular by the Government, both dated July 7, said that the IGST needs to be paid only for exports after July 1, 2017, and detail the eligibility of exporters to provide the necessary documents.

“Various communications have been received from the field formations and exporters on the issue of difficulties being faced while supplying the goods or services for export without payment of integrated tax… because of which exports are being held up,” according to the circular issued by the Central Board of Excise and Customs’ GST Wing.

The circular stated that another issue with the rules was that the bond or LUT was to be submitted to the jurisdictional commissioner, who could often be located far from the exporter, thus causing them hardship. In light of this, the circular said that the documents can be collected by the jurisdictional assistant or deputy commissioner.

“These clarifications bring much needed relief for the exporters with regard to export without payment of IGST,” PwC said in a note. “Exports had come to a halt in the absence of clarity on procedure for submission of bond/LUT for exports. While exporters have the option to export on payment of IGST and subsequently claim refund of IGST paid, this would impact the cash flow.”

The Centre allowed the bond or LUT to be submitted manually and not electronically on the GST portal.

“Further, in exercise of the powers conferred by section 168 of the said Act, for the purpose of uniformity in the implementation of the said Act, the Bond/Letter of Undertaking required to be furnished under rule 96A of the said rules may be furnished manually to the jurisdictional Deputy/Assistant Commissioner… till the module… is available on the common portal,” the circular added.

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Source:The Hindu