Finance Ministry allows exporters to show Letter of Undertaking in place of bond for GST

The Finance Ministry today announced that it will allow exporters to show Letter of Undertaking instead of a bond when exporting of goods or services or both.

Union Minister for Finance and Corporate Affairs Arun Jaitley addresses at the India Economic forum organised by the Bloomberg in Mumbai on Sept 22, 2017. Photo: IANS/PIB

Key highlights:

Government has eased the rules on the GST for exporters

Finance Ministry has now allowed exporters the facility of furnishing a Letter of Undertaking in place of a bond when filing for GST

Now no bank guarantee will be required, says Finance Ministry

The government has eased the rules on the goods and service tax (GST) for exporters after many of them protested over issues faced with it. The Finance Ministry has now allowed exporters the facility of furnishing a Letter of Undertaking in place of a bond when filing GST for export of goods and services.

To facilitate exports under GST, it has been decided to allow exporters the facility of furnishing Letter of Undertaking in place of a bond.

— Ministry of Finance (@FinMinIndia) September 30, 2017

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In a series of tweets the Finance Ministry said, “To facilitate exports under GST, it has been decided to allow exporters the facility of furnishing Letter of Undertaking in place of a bond.”

It further said that this facility of furnishing Letter of Undertaking, in place of a bond, is allowed to exporters for exporting goods or service or both.

“Now no bank guarantee will be required. The relevant notification for this will be issued in due course,” it added.

This move comes after exporters met with Finance Minister Arun Jaitley on Thursday this week to press for stimulus and resolution of GST related problems to boost sluggish shipments that are one reason for slowing the economy.

This facility of furnishing Letter of Undertaking, in place of a bond, is allowed to exporters for exporting goods or services or both.

— Ministry of Finance (@FinMinIndia) September 30, 2017

This was the second meeting in less than two weeks with Finance Ministry officials.

Expeditious refund of duties, deferment of filing of GST returns for six months and expansion of the ambit of the composition scheme were some of the issues which were raised by industry and exporters during the last meeting.

"In absence of clear refund timelines, the new duty drawback rates notified on September 21 have added to the woes of exporting and thus effecting their order book position. It is suggested that the transition period of drawback may be extended beyond September 30 2017 till December 31," FIEO President Ganesh Gupta said on Thursday.

Traders, particularly SMEs, are facing issues in filing returns, which is increasing their compliance burden.

(With inputs from PTI)

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