How to execute Bank Guarantee or LUT with DGFT

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Guidelines to execute Legal Under Taking and BG with DGFT

 

 

How to execute Bank Guarantee or LUT with DGFTThis post is a guidelines to exporters and importers in India about execution of Legal Under Taking (LUT) and/or Bank Guarantee (BG) with Director General of Foreign Trade, DGFT.

 

According to Foreign Trade Policy of India, The Bank Guarantee / Legal Agreement is to be executed by the surety Bank (Guarantor)/ importer/exporter (party) on a non-judicial stamp paper for an amount as may be prescribed by the concerned State Government under the Indian Stamp Act, 1899 or State Act, as the case may be. Any stamp duty payable on the B.G./LUT or any document executed there under shall be borne by the party.

 

If the party is a sole proprietary firm, the Bond/Legal Agreement shall be executed by the Sole Proprietor of the firm, along with his permanent and complete residential address. "In such a case the expression "Importer/Exporter" or "Party" used in the opening paragraph of the Legal Agreement should include his/her heirs, successors, administrators and assignee".

If the party is a partnership firm, the LUT shall be executed in the name of the partnership firm, through the partners to be specified, or the Managing partner, if so specified in the Partnership Deed, along with the address of the partner/Managing Partner, and the place where the Registered Office of the partnership firm is situated. "In that case, the expression "Importer/Exporter" or "Party" used in the opening paragraph of the Legal Agreement should include jointly and severely all the partners, through respective legal heirs, successors, administrators and assignee as well as the portions where body corporate or not having the control of the affairs of the said Firm".

 

If the party is a Limited Company, the LUT shall be executed by the Managing Director or two Directors of the Company, along with the seal of the Company and also specifying the address of the Registered Office of the Company. Alternatively the LUT shall be executed by a senior executive of the Company of the rank of General Manager and one of the Directors of the Company who have been authorized by the board of Directors for this purpose, along with the seal of the Company and also specifying the address of the Company. In such cases LUT shall be countersigned by the Company Secretary. "In that case, the expression "Importer/Exporter" or "Party" used in opening paragraph of the Legal Agreement should include its successors in business and assignee".

 

Each page of the Bond/Legal Agreement is to be signed. The importer/ exporter shall also give a separate declaration along with BG/LUT to the effect that in the event of any change in the Customs Duty based on which the BG/LUT is executed for clearance of the imported goods, he shall execute supplementary BG/LUT for the remaining value at the time of clearance of last consignment, failing which he shall be liable to such action as is considered proper by the Regional/ customs authority.

 

This post is a guideline to exporters and importers in India about execution of Legal under Taking (LUT) and/or Bank Guarantee (BG) with Director General of Foreign Trade, DGFT. If you wish to add your views and experience in executing under Taking (LUT) and/or Bank Guarantee (BG) with Director General of Foreign Trade, DGFT, write below.

 

 

Comment below about this post, How to execute Bank Guarantee or LUT with DGFT

 

The above information is a part of Export Import Training online

 

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Comments


TARUN: DEAR sir ple explain me about LUT , i m vendor and my party in greatar noida (NSEZ) BEFORE GST I SALE IN I FORM NOW COMPANY WANT LUT AND SECURITY BOND WITH BANK GUARNTEE AS PER EXCISE RULE KINDLY EXPLAIN ME ALL THING I AM WAITED FOR YOUR REPLY

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