GST Letter of Undertaking

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File Letter of Undertaking (LUT) in GST

LUT in GST: Full form/meaning is Letter of Undertaking. It is prescribed to be furnished in the form GST RFD 11 under rule 96 A, whereby the exporter declares that he or she will fulfill all the requirement that is prescribed under GST while exporting without making IGST payment.

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Who needs to file LUT in Form GST RFD-11?

GST LUT is to be submitted by all GST registered goods and service exporters. The exporters who have been prosecuted for any offense and the tax evasions exceeding Rs 250 lakhs under CGST Act or the Integrated Goods and Service Act, 2017 or any existing laws are not eligible to file the GST LUT. In such cases, they would have to furnish an Export Bond.

Under CGST Rules,2017, any registered person can furnish an Export bond or LUT in GST RFD 11 without paying the integrated tax. They can apply for LUT if:

  • They intend to supply goods or services to India or overseas or SEZs
  • Are registered under GST
  • They wish to supply goods without paying the integrated tax

Documents Required for LUT under GST

An LUT can be submitted by any individual who is registered under GST provided he has not been executed in case of tax evasion exceeding Rs.250 lakh or any other offense.

  • LUT cover letter - request for acceptance - duly signed by an authorized person
  • Copy of GST registration
  • PAN card of the entity
  • KYC of the authorized person/signatory
  • Canceled Cheque
  • Authorized letter
  • GST RFD11 form
  • Copy of the IEC code

Eligibility for Filing LUT in GST

Any registered taxpayer who is into exporting goods and services can make use of Letter of Undertaking. Any person who has been prosecuted for tax evasion for an amount of Rs. 250 lakh or above are ineligible.

The validity of such LUT’s is for one year, and an exporter is required to furnish a fresh LUT for each financial year. If the conditions mentioned in the LUTs are not satisfied within the specified time limit, then the privileges will be revoked, and the exporter will have to furnish bonds.

Other assesses should furnish bonds if the export is being made without the payment of IGST. LUTs / Bonds can be used for:

  • Zero-rated supply to SEZ without payment of IGST
  • Export of goods to a country outside India without the payment of IGST.
  • It is providing services to a client in a country outside India without paying IGST.

Export Bond for GST

Entities that are not eligible to submit a Letter of Undertaking based on the conditions mentioned will have to furnish an export bond and a bank guarantee. The applicant needs to cover the amount of tax involved in the export based on estimated tax liability self-assessment.

Export bond should be furnished on non-judicial stamp paper of the value as applicable in the State in which the bond is being furnished.

Also, exporters can furnish a running bond, so that export bond needs not to be executed for each export transaction. However, if the outstanding tax liability on exports exceeds the bond amount at any time, then the exporter must furnish a new bond to cover the additional liability.

A bank guarantee can be mandated along with an export bond. The value of the bank guarantee should usually not exceed 15% of the bond amount. However, based on the exporter’s track record, the bank guarantee required to be submitted with the export bond can be waived off by the jurisdictional GST Commissioner.

Filing of Letter of Undertaking (FORM GST RFD-11)

  • Registered Name
  • Address
  • GST No
  • Date of furnishing
  • Signature, date, and place
  • Details of witnesses (Name, address, and occupation)

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GST Registration FAQ's

GSTIN and Name (Legal Name) of the Taxpayer will be prefilled based on login. The Taxpayer needs to select the financial year for which LUT is being filed, enter the name, address, and occupation details of two independent and reliable witnesses.

It is not mandatory, but if the Taxpayer wants to record the manually approved LUT to be available in online records, he can furnish it with the online application.

Primary authorized signatory/Any other Authorized Signatory needs to sign and file the verification with DSC/EVC. The authorized signatory can be the working partner, the managing director, or the proprietor or by a person duly authorized by such operating partner or Board of Directors of such company or proprietor to execute the form.

After successful filing, the system will generate ARN and acknowledgment. You will be informed about successful filing via SMS and Email, and you can also download the acknowledgment as a PDF.

Yes, the Taxpayer will be able to see his LUT after filing.

It is mandatory to furnish the Letter of undertaking (LUT) to export the goods, services, or both without paying the IGST.

In case if the exporter fails to provide the LUT then he has to pay the IGST or furnish an export bond

Any person who is exporting goods or services can furnish the LUT.