FIEO welcomes procedural simplification of exports under GST regime
October 3, 2017: The government has exempted small exporters from furnishing bank guarantee for shipping goods and services. Under the Goods and Services Tax, an exporter can get exemption from payment of Integrated GST by submitting a bond or Letter of Undertaking (LUT).
Welcoming the decision, Ganesh Kumar Gupta, President, FIEO said that this is much needed simplification which will help in reducing transaction time and cost of exporters.
FIEO chief pointed out that the micro and small exporters will be the immediate beneficiaries. The exporters of these categories found it difficult to get bank guarantees unless submit/ furnish collaterals. This in turn brought down their liquidity affecting the working capital and directly impacted production.
FIEO said that we should gradually move towards e-LUT (Electronic Legal Undertaking) which can be furnished online so as to eliminate any physical interaction with the tax authorities.
Over a period of time, the requirement of LUT can also be eliminated, said Gupta, as matching of exports invoice with shipping bill is envisaged under GSTN, the purpose for which LUT is being asked for.