Welcoming the decision to dispense with Bank Guarantee requirement under Bond and replacing it with Legal Undertaking (LUT), Ganesh Kumar Gupta, President, FIEO said that this is much needed simplification which will help in reducing transaction time and cost of exporters.

FIEO Chief said that micro and small exporters will be immensely benefitted as they were struggling to get bank guarantee unless furnish collateral to the bank which affects their liquidity and thus flow of working capital impacting production.

FIEO said that 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 GSTN, the purpose for which LUT is being asked for.