This circular provides clarification on procedural issues relating to export of goods and services without payment of integrated tax by furnishing a Bond or Letter of Undertaking (LUT) under rule 96A of the CGST Rules.

It clarifies that exporters eligible under Notification No. 16/2017–Central Tax may export under LUT, while all other exporters are required to furnish a bond in FORM GST RFD-11 on non-judicial stamp paper. To reduce compliance burden, exporters furnishing a bond are permitted to submit a running bond, covering the estimated tax liability on exports, instead of separate bonds for each consignment. Where the bond amount becomes insufficient, a fresh bond is required.

The circular further clarifies that furnishing of a bank guarantee is discretionary, based on the exporter’s track record, and should normally not exceed 15% of the bond amount. LUTs are valid for twelve months, and non-compliance with LUT conditions may require the exporter to switch to a bond.

It also specifies that Bond or LUT is to be accepted by the jurisdictional Assistant/Deputy Commissioner, and exporters may approach either Central or State tax authorities until the administrative mechanism is finalized. Instructions on sealing of export consignments are reiterated, and the clarifications apply to exports made on or after 1 July 2017, with the objective of facilitating smooth export operations under GST.