1. To promote exports under GST, government allows exporters to furnish ‘Letter of Undertaking’ in place of bond

To promote exports under GST, government allows exporters to furnish ‘Letter of Undertaking’ in place of bond

The government has decided to exempt the small exporters from furnishing bank guarantee for shipping goods and services.

By: | New Delhi | Published: September 30, 2017 3:45 PM
government allows exporters to furnish 'Letter of Undertaking', promote exports, GST-related problems to boost overseas shipments, arun jaitley, finance minister exports, Letter of Undertaking' in place of bond, finance ministry exports The government has decided to exempt the small exporters from furnishing bank guarantee for shipping goods and services. (Representational image/ Reuters)

The government has decided to exempt the small exporters from furnishing bank guarantee for shipping goods and services. The move comes a day after meeting between FM Arun Jaitley and exporters for resolution of GST-related problems to boost overseas shipments, as per PTI. The finance ministry clarified that a “Letter of Undertaking” will have to be submitted in place of a bond, for exporting both goods or services. The further stated that no bank guarantee will also be required while adding that a relevant notification will be issued in due course. “The issue of cash blockage is expected to be partially addressed by this measure. More measures are under consideration,” the ministry said.

Earlier in a meeting with the finance minister, industry and exporters raised issues like an expeditious refund of duties, deferment of filing of GST returns for six months and expansion of the ambit of the composition scheme. Exporters also wanted a resolution of problems arising from the implementation of the Goods and Services Tax (GST).

“In absence of clear refund timelines, the new duty drawback rates notified on September 21 have added to the woes of exporting and thus affecting 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, as per PTI.

“The minister gave a sympathetic hearing to our concerns and assured all possible help. He has taken all our points positively,” he added. The FIEO also pressed for exemption from GST for merchant exporters, immediate start of the refund process with exporters facing liquidity issues and allowing export benefit scrips for payment of IGST and CGST, the report said.

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