We make Mobile applications on Google Play and iOS AppStore. All our revenue comes under Export of Service.We are filing the GSTR-1 form for July 2017. We are mentioning our revenue as Export and Exempt from GST.
Question is - Do we need to give some undertaking OR bank guarantee OR some other procedure? Pl. note our yearly revenue is around 60L. Someone mentioned that undertaking can be given only if the revenue is very high etc?
Looking forward to your guidance and early reply as we need to submit the return by 5th Sep. Thanks.
For how much amount we need to give the bond for? Is it only for 1 month which can then be used for next month again. Assume that the revenue is approximately same on a monthly basis.
24 July 2024
For exporters of services under GST, particularly those whose services are considered zero-rated (i.e., they attract 0% GST), there are certain provisions related to bonds or undertakings that may apply, especially when claiming refund of input tax credit (ITC) accumulated due to exports.
Here are the key points to address your queries:
### 1. Undertaking or Bond Requirement
- **Bond or Undertaking**: According to GST rules, exporters claiming refund of accumulated ITC can furnish either a bond or a letter of undertaking (LUT) instead of paying GST on exports and claiming a refund later. This helps in avoiding upfront payment of GST and waiting for a refund.
- **Eligibility for LUT**: Normally, a bond or LUT is required for exporters with a large volume of exports or higher turnover. However, the eligibility for furnishing an LUT is not solely based on revenue amount but also on the exporter's compliance record. If your compliance is good and you fulfill the conditions laid down by the GST authorities, you can apply for an LUT.
- **Procedure**: To furnish an LUT, you need to submit Form GST RFD-11 on the GST portal. Along with the form, you may be required to provide certain documents as specified by the GST authorities. The LUT needs to be furnished for each financial year.
### 2. Bond Amount and Duration
- **Bond Amount**: The bond or LUT is usually required to cover the amount of potential GST liability on exports. The exact amount is determined based on the expected turnover and export value. The bond amount is typically based on estimated tax liability and can vary based on your specific circumstances.
- **Duration**: The LUT or bond is typically valid for one financial year (April to March). You need to renew the LUT or bond annually if you continue to export services in subsequent years.
### 3. Monthly Filing and Utilization
- **Monthly Filing**: While filing GSTR-1 for exports, you will mention your exports as exempt and provide details accordingly. You need to ensure accurate reporting of export invoices and other relevant details in GSTR-1.
- **Utilization of Bond**: The bond or LUT you furnish allows you to export goods or services without paying GST upfront. The accumulated ITC can be utilized against your GST liability on other supplies or claimed as a refund.
### Summary
- For your annual revenue of approximately 60 lakhs from export of services, you may qualify to furnish an LUT instead of a bond, provided your compliance record is good. - The amount of the bond or LUT is based on your estimated GST liability on exports. - The LUT or bond is valid for one financial year and needs to be renewed annually.
It's advisable to consult with a GST practitioner or a chartered accountant to assist you in determining the exact requirements and procedures for furnishing an LUT or bond under GST, considering your specific business situation and compliance status. This will ensure smooth compliance with GST regulations related to export of services.
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