Letter of undertaking (LUT) under GST
Letter of Undertaking for exporting without paying GST
What is a Letter of undertaking (LUT) under GST?
The export of goods and services is vital for the growth of India’s economy. In order to promote Exports from India and to make them competitive in Global Market, the Government has waived off the GST on exports of goods and services. There are two ways in which this benefit can be exercised. First is to pay the applicable GST on the export of goods or services and afterwards taking Refund of the same and the second is not paying any GST on export by filing a Letter of Undertaking (LUT).
For those exporters who are not willing to block their working capital in the form of GST paid on exports and then taking Refund of the same, LUT would become the best mode to export their goods or services without any payment of GST being made.
Letter of Undertaking is to be furnished in Form GST RFD-11 on the common portal of GSTN in order to export the goods or services without payment of GST. The filed LUT will remain valid for a Financial Year. All exporters who are registered under GST are eligible to submit LUT except those who have been prosecuted and the amount of tax evasion exceeds Rs 250 lakhs under any of the existing GST Laws. Those who are ineligible to file LUT have to furnish an export bond along with bank guarantee to export their goods or services without payment of GST.
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Benefits of Letter of undertaking (LUT) under GST
Benefits of LUT under GST
- Exports without payment of GST
- Avoid refund procedures
- Lessworking capital required
- Simple & easy process
Required Documents for Letter of undertaking (LUT) under GST
- GST Registration Certificate
- PAN card of the entity
- PAN & Adhar of applicant
- IEC Certificate
- Authority Letter
- Cancelled cheque
- Identity proof of two witnesses
- Collection of information and documents
- Drafting of necessary documents
- Filing& submission of application
- Issue of acknowledgment letter
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Letter of undertaking (LUT) under GST
Currently, the revision of a signed and submitted LUT Form is not possible. So, check the preview of the form before submission to verify its correctness.
The Authorized Signatory can be the working partner, the Managing Director or the Company Secretary or the proprietor. RFD-11 can be submitted through EVC also in which an OTP will be received on the registered mobile no. and email address. Note that Companies and LLPs can file the LUT form using DSC only.
LUT will be valid for a financial year i.e. If LUT was furnished any time in FY 2018-19, it shall remain valid upto 31st March 2019. Therefore, for FY 2019-20, a fresh LUT needs to be furnished.
The exporter needs to declare the following three things:-
- Export of goods or services will be completed within 3 months from the date of issue of Export invoice or further period (if any) allowed by the Commissioner.
- To abide by GST Law in respect of exports
- If (s)hefailed to export, (s)he would pay IGST along with applicable interest.
The exporter has to pay the applicable IGST along with Interest at the rate of 18% p.a. from the date of issue of export invoice upto the date of payment of IGST.
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