The Government takes a number of steps to make exporting easier in order to promote exports. As long as the exporter complies with specific requirements, export supplies are tax-free when domestic market supplies are. Let's talk about the Rule 96A of CGST Rules, 2017.
- When an exporter opts to supply goods or services for export without payment of tax, he should furnish a bond or Letter of Undertaking (LUT) in Form GST RFD-11 to the jurisdictional commissioner.
- Form GSTR RFD-11 binds the exporter to pay the tax along with interest specified under Section 50 of the Act when he fails to fulfill certain conditions.
- The exporter should export the goods within THREE MONTHS from the date of issue of the invoice.
- The exporter should receive payment for the export of services within ONE YEAR from the date of issue of the invoice.
- If the exporter fails either to export the goods within THREE MONTHS or receive payment for the export of services within ONE YEAR, the exporter has to pay applicable tax and interest within 15 days from the expiry of THREE MONTHS or ONE YEAR.
- When the exporter fails to pay the tax amount along with applicable interest as he fails to fulfill the conditions, the export as allowed under bond or LUT shall be withdrawn, and the said amount will be recovered under Section 79 of the CGST Act.
- Once the exporter pays the amount due, the bond or LUT will be restored, and the exporter can continue to export the supplies without payment of tax.
Reference: Rule 96A of CGST Rules, 2017
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Disclaimer: This article is only for the purpose of understanding the provisions of the Act, the author bears no responsibility on decisions taken by the readers whatsoever. E&OE.