Doing Export of Services ? GST is no more a worry for you.
The most awaited notification has been finally issued by the Government on 4th October, 2017 vide Notification No. 37 /2017 which exempts all the registered taxpayers under GST from furnishing bank guarantee for shipping goods and services. Thus, now onwards, any registered taxpayer can only execute ‘ letter of undertaking ’(LUT) who intends to supply goods or services for export without payment of integrated tax. Now Export without Payment of GST and Bond only LUT will suffice.
As per the Notification a registered person shall comply with the following conditions:
(i) 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 Section 12 of Central Goods and Services Tax Act, 2017 or Section 13 of the Integrated Goods and Services Tax Act, 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;
(ii) the Letter of Undertaking shall be furnished on the letterhead of the registered person, in duplicate, for a financial year in FORM GST RFD – 11 referred to in sub-rule (1) of Rule 96A of the Central Goods and Services Tax Rules, 2017 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;
(iii) where the registered person fails to pay the tax due along with interest @18%, as specified under sub-rule (1) of Rule 96A of Central Goods and Services Tax Rules, 2017, within the period (15 days) mentioned in clause (a) or clause (b) of the said sub-rule, the facility of export without payment of integrated tax will be deemed to have been withdrawn and if the amount mentioned in the said sub-rule is paid, the facility of export without payment of integrated tax shall be restored.
The provisions of this notification shall mutatis mutandis apply in respect of zero-rated supply of goods or services or both made by a registered person (including a Special Economic Zone developer or Special Economic Zone unit) to a Special Economic Zone developer or Special Economic Zone unit without payment of integrated tax.
This is a big relief, especially to small exporters, earlier different export organizations had approached the finance minister with concerns over capital blockage under the new taxation, that was causing stress on small and medium exporters.