New Delhi, Oct 3 (KNN) Eyeing at addressing the concern of capital blockage under the Goods and Services Tax (GST), the government has announced that small exporters are to be exempted from furnishing bank guarantee for shipping goods and services, the finance ministry said.
Coming as a relief to the sector, earlier different export organizations had approached the finance minister with concerns over capital blockage under the new taxation, that was causing stress on small and medium exporters.
According to the new announcements, an exporter can get exemption from payment of IGST if he submits bonds or Letter of Undertaking (LUTs).
“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,” the statement from the finance ministry said.
The relevant notification will be issued in due course. The Ministry expects the issue of capital blockage to get addressed to some extend by the new provision.