Bank guarantee is no longer required to furnish bond,if exporter is registered with the Export Promotion Council. Sometime back, we had raised this question on the Twitter handle of the Government and appealed for the revocation of the requirement of furnishing bond for small exporters. You can refer the piece here: Revoke requirement of LUT/Bond for small service providers – An appeal to the Govt

As a relief measure to the exporters, the Government has done away with the requirement for bank guarantee for the filing of a bond in some specific cases. Previously, to submit a bond, a bank guarantee is required to be filed along with the bond which should be equivalent to 15% of the IGST on exports. You can find more details about the same here: Payment of GST on Export of Services – Letter of undertaking or Bond

Vide this circular, the Government has declared that if any exporter is registered with the Export Promotional Council (EPC), he can be allowed to submit bond without bank guarantee on submission of a self attested copy of the proof of registration with the Export Promotional Council (EPC).

Further, as per the circular, “if a person having one Permanent Account Number is registered in more than one State. It may so happen that a registered person may not satisfy the condition regarding foreign inward remittances in respect of one particular registration, because of splitting and account of receipts and turnover across the different registered person with the same PAN. But the total amount of inward foreign remittances received by all the registered persons, having one Permanent Account Number, maybe Rs. 1 crore or more and it also maybe 10% or more of total export turnover. In such cases, the registered person can be allowed to submit bond without bank guarantee.

That is to say, if an exporter has a total receipt of more than 1 crore on PAN India basis but state wise it is less than 1 crore, in that case as well, the exporter may submit bond without bank guarantee.

If you are not covered under any of the above situations, you still can avail this exemption. If you are not covered in both the above cases, then you need to request the Commissioner to waive off the requirement for bank guarantee and allow you to file the bond without bank guarantee.

We will be back with more details on registration with the Export Council soon.

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