TaxTMI 
TaxTMI 
Hello,
What is the implication for an exporter under LUT if proceeds from such exports are received from a third party.
Realization of Export proceeds
24 Feb 2025 
7 Replies 
2108 Views Asked by
Third-party export payments permitted under FEMA conditions; genuine LUT exports documented by E BRC remain non-taxable under GST.
FEMA permits third party payments for export transactions subject to documentary safeguards, AD bank satisfaction, routing through banking channels, declaration in the Export Declaration Form, and exporter responsibility to realise and repatriate proceeds; reporting should show the declared third party. Under GST, genuine exports under a Letter of Undertaking are not taxable with IGST; export completion evidenced by E BRC or self generated E BRC on IRM and EDPMS clearance removes further GST liability, and IGST paid may be refunded or offset through ITC. (AI Summary)
FEMA permits third party payments for export transactions subject to documentary safeguards, AD bank satisfaction, routing through banking channels, declaration in the Export Declaration Form, and exporter responsibility to realise and repatriate proceeds; reporting should show the declared third party. Under GST, genuine exports under a Letter of Undertaking are not taxable with IGST; export completion evidenced by E BRC or self generated E BRC on IRM and EDPMS clearance removes further GST liability, and IGST paid may be refunded or offset through ITC. (AI Summary)