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Last updated: 03 Oct, 2017  

FIEO-logoTHMB SME exporters exempt from giving bank guarantee, FIEO hails move

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Saurabh Gupta | 03 Oct, 2017
To facilitate small exports under the Goods and Services Tax (GST), the government has exempted SME exporters from furnishing bank guarantee.

Welcoming the decision to dispense with Bank Guarantee requirement under Bond and replacing it with Legal Undertaking (LUT), 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 said that micro and small exporters will be immensely benefitted as they were struggling to get bank guarantee unless furnish collateral to the bank which affects their liquidity and thus flow of working capital impacting 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.

"To facilitate exports under GST, it has been decided that the facility of furnishing Letter of Undertaking, in place of a bond, for exporting goods or services or both shall be allowed to exporters and no bank guarantee will be required," government said in a release on Saturday.

The issue of cash blockage is expected to be partially addressed by this measure. More measures are under consideration, the release added.
 
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Exporters exempt from giving bank guarantee
Naushd | Wed Oct 4 15:38:42 2017
Sir this notification by our government is most welcome and will help small exporters in big way and I really thank our Hon. finance Minister for understanding & helping small and medium exporters. This notification is effective from? If with immediate effect why our central excise and GST department not received any notification from the Board.


It's good decision by governent
Bhagawath Prasad | Wed Oct 4 02:54:08 2017
While I understand the implications of security measures forex getting loaded into exporters accounts , it was actually harming exporters with huge amount of paper work, I am glad that government realised it now to simplify exporters issues , i would request government to fund exporters liberally thru banks at much cheaper interest rates , it's critical to compete global market.


 
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