GST case filed for removal of Bond/LUT

GST case filed for removal of Bond/LUT

GST case filed for removal of Bond/LUT on export of services. A delhi based web development and IT company has filed a writ petition in Delhi High court.  The matter is the necessity of furnishing bond and bank guarantee in case of exports.  Rule 96A of CGST Rules r/w CBEC Circular No. 4/4/2017-GST require an exporter to furnish the Bond/LUT before making export of Goods/services. This provision is applicable when exporter choose to make export without payment of IGST. 

Rule 96A read as under: 

“ 96A. Refund of integrated tax paid on export of goods or services under bond or Letter of Undertaking.- (1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of —

(a) fifteen days after the expiry of three months from the date of issue of the invoice for export, if the goods are not exported out of India; or
(b) fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.”

In erstwhile service tax there was no tax on export of services. This is a hardship on all exporters of services.