Simplified Bond/LUT Filing for Exports – CBIC Circular No. 4/4/2017-GST

2025-03-03 10:40:19 02March

02March

Simplified Bond/LUT Filing for Exports – CBIC Circular No. 4/4/2017-GST

<h3><strong>Key Highlights from CBIC Circular No. 4/4/2017-GST</strong></h3><p>On <strong>July 7, 2017</strong>, the <strong>Central Board of Excise and Customs (CBIC)</strong> issued <strong>Circular No. 4/4/2017-GST</strong>, providing crucial clarifications for exporters supplying goods or services <strong>without paying IGST</strong> under <strong>Rule 96A of CGST Rules, 2017</strong>. The circular addresses industry concerns, making compliance easier.</p><h3><strong>1. Who Needs to Furnish a Bond or LUT?</strong></h3><ul><li><strong>Exporters covered under Notification No. 16/2017-Central Tax</strong> can export under <strong>Letter of Undertaking (LUT)</strong> without a bond.</li><li>Other exporters <strong>must furnish a bond</strong> before making exports.</li></ul><h3><strong>2. Introduction of Running Bonds</strong></h3><ul><li>Instead of requiring a <strong>separate bond for each export</strong>, exporters can now submit a <strong>running bond</strong> with a <strong>self-assessed tax liability</strong>.</li><li>The exporter must ensure the outstanding tax liability <strong>remains within the bond amount</strong>. If it exceeds, a fresh bond must be submitted.</li></ul><h3><strong>3. Bank Guarantee Requirement Relaxed</strong></h3><ul><li><strong>Jurisdictional Commissioners</strong> will decide the <strong>bank guarantee amount</strong> based on an exporter’s track record.</li><li><strong>Well-established exporters may not require a bank guarantee</strong>, while for others, it <strong>should not exceed 15% of the bond amount</strong>.</li></ul><h3><strong>4. Validity & Submission of LUT</strong></h3><ul><li>LUTs will be valid for <strong>12 months</strong>.</li><li>If an exporter <strong>fails to comply</strong> with LUT conditions, they will have to furnish a bond instead.</li><li><strong>Deadline:</strong> Exporters could continue using existing LUTs/bonds until <strong>July 31, 2017</strong>, after which they had to submit revised documents.</li></ul><h3><strong>5. Flexibility in Submission Authority</strong></h3><ul><li>Exporters can submit <strong>Bond/LUT</strong> to the <strong>Deputy/Assistant Commissioner</strong> at their <strong>principal place of business</strong>.</li><li>Until a clear <strong>administrative mechanism</strong> is in place, exporters can choose between <strong>Central or State Tax Authorities</strong> for submission.</li></ul><h3><strong>6. Export Container Sealing Procedure</strong></h3><ul><li>The <strong>existing system of bottle-sealing</strong> under <strong>Central Excise supervision</strong> continued until <strong>September 1, 2017</strong>.</li><li>Sealing was done under the <strong>officer with physical jurisdiction</strong>, and reports were forwarded to the <strong>Deputy/Assistant Commissioner</strong>.</li></ul><h3> </h3><p><a href="https://cms.plasament.com/storage/chirag-singla/circularno-4-gst-2.pdf">circularno-4-gst-2</a><br> </p>