Micro and small exporters will benefit, says Gupta

The Federation of Indian Export Organizations (FIEO) has welcomed the decision to dispense with Bank Guarantee requirement under Bond and replacing it with Legal Undertaking (LUT).

FIEO President Ganesh Kumar Gupta said this was much needed simplification which will help in reducing transaction time and cost of exporters.

Micro and small exporters will immensely benefit as they were struggling to get bank guarantee unless they furnished collateral to the bank which affects their liquidity and flow of working capital impacting production.

FIEO said “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 Goods and Services Tax Network (GSTN), the purpose for which LUT is being asked for. fii-news.com