FAQs on LUT (Letter of Undertaking)

FAQs on LUT (Letter of Undertaking)

Q.1  What is LUT in GST?
  1. Letter of Undertaking is commonly known as LUT. The Letter of Undertaking (LUT) is prescribed to be furnished in form GST RFD 11 under rule 96 A, whereby the exporter declares that he/she would fulfil all the requirements prescribed under GST while exporting without making IGST payment.

Q.2 When will you file LUT in GST?
  1. You need to submit a new LUT for each financial year. If the goods for export are not exported within three months of Date of Invoice issue, then the Exporter is liable to pay GST along with 18% interest within 15 days according to Section 50 (1).

Q.3 What are the documents required for LUT?
  1. Documents required for LUT
Basically, there is no requirement of any documents to upload with online application. However, to complete the application, following documents/ information must be available:-
  1. Detail of witnesses along with their identity and address proofs.
  2. Consent letter of witnesses for such LUT.
  3. Acceptance letter from department acknowledging LUT of any previous year.
  4. Although, there is no document required to submit manually to department, it is advisable to create a proper file with all documents as required in manual mode of submission of LUT.

Q.4 Application form for filing LUT in GST.
  1. The Letter of Undertaking (LUT) is prescribed to be furnished in form GST RFD 11 under rule 96 A, whereby the exporter declares that he/she would fulfil all the requirements prescribed under GST while exporting without making IGST payment.

Q.5 How to furnish LUT in RFD-11 on GST portal?

  1. All registered tax payers who export the goods or services will now have to furnish Letter of Undertaking (LUT) in GST RFD-11 form on the common portal of GSTN in order to make exports without payment of IGST.

    When to apply/file? - Letter of undertaking has to be filed /submitted online before exporting the goods/services.


  2. Prior to this, exporters had to manually submit the filled and signed RFD-11 on Business letterhead in duplicate:-
  1. One to the Jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business where the verification with the Export documents happens through ICEGATE medium.
  2. Another along with the Export documents to the Customs clearing authority.

Just like the earlier excise regime, this led to exporters losing considerable time and operating expense on this compliance.

Eventually, this process has now been rationalised and made simple & quick, giving transparency in the entire process of exports by an exporter to all the stakeholders involved.

Note that the Furnishing of Bond has to be on a non-judicial stamp paper and so needs a manual submission.

Here are the steps to be followed on GST portal/GSTN to furnish LUT:

Step 1: Loin to GST portal



Step 2: Go to 'Services' Tab> 'User Services'> Select 'Furnish Letter of Undertaking (LUT)'



Step 3: Select the financial year for which Letter of Undertaking is applied for from the LUT applied for financial year drop-down list.



Step 4: A confirmation message appears, GST portal sends this ARN at registered email and mobile of the taxpayer by e-mail and SMS.



Step 5: You can click on the DOWNLOAD button to download the acknowledgement.


You may also check out the Letter of Undertakings previously furnished on the GST portal. On the home page, Go to ‘SERVICES’ > ‘User Services’ > ‘View my Submitted LUTs’ > Select period > Check out the list of LUTs furnished during the selected period > Click ‘VIEW’ against the particular Letter of Undertaking to view the detail.

Q.6 What are the benefits of LUT in GST registration?
  1. Exports without tax payment
By filing LUT under GST, an exporter can export goods or services without paying the taxes. If LUT is not filed, the exporter must first pay the required tax while making exports and then claim a refund to avail benefit of zero-rated exports.

  1. Saves working capital
The regular exporters are at a huge benefit by filing LUT online as the refund process under another route is a time-consuming process. During which the bunch of capital is blocked in the form of a due refund. With this mode, the capital is free to be utilized for other necessary requirements. It also reduces the cost of exports.

  1. An entire financial year validity
The Letter of Undertaking, once filed is valid for the whole financial year in which it is filed. Hence, unlike refund process, an exporter does not need to go through the procedural requirements every time an export consignment is carried out.

  1. Simple and online process
The filing of LUT and its acceptance, both are made online since April, 2018. The applicant does not need to visit the officers for acceptance. The whole process can be completed online by submitting a few required documents.



For more information on this visit https://www.taxaj.com/

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