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Execution of Bond/LUT-services exporters at receiving end


BOND or LUT for exporters

The exporters Bond was originally introduced for exporter of goods to safeguard revenue interest from the place of removal to the port of export, during the movement of goods. Even now the government is confining with this requirement for export of goods. As the GST is common to goods and services the requirement of bond is extended to Service exporters also. The service exporters will do the exports first and then invoice or receives in advance. There is no scope for discarding with the export. The realization of foreign exchange will be monitored by RBI. In this scenario I do not find any need for the Bond or LUT by the Service Exporters. Consequence to this requirement there are penal provisions if there is a delay in realizing the proceeds by the exporters. The requirement for BOND or LUT is must be waived for the Service Exporters. As the author mentioned this is draconian provision, which discourages the service exporters. R Vaidyanathan Consultant Indirect Taxation

Ramadoss Vaidyanathan 25/07/2017

 

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