A letter of Undertaking is a document that exporters can file to export goods or services without paying taxes. Under the new GST regime, all exports are subject to IGST, which can later be reclaimed via a refund against the tax paid. A LUT (Letter of Undertaking) spares exporters the effort of pursuing a refund and eliminates the blocking of funds by way of tax payments.

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 offence and 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.

Here the motive of the government was to expand the export base by providing relief on exports.

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:

1. They intend to supply goods or services to India or overseas or SEZs

1. Are registered under GST

1. They wish to supply goods without paying the integrated tax.
   

Documents Required for LUT under GST

1. KYC documents of two witnesses

1. Nature of employment of witnesses

1. Copy of last year's LUT (if any).
   

Process for Filing LUT in GST

1. First, you have to log in to the GST portal for filing a LUT certificate.

1. Under “SERVICE TAB”, select “USER SERVICES” drop-down has the option of FURNISH LETTER OF UNDERTAKING (LUT)

1. After selecting this option, you have to choose the financial year for which you want to file a letter of undertaking.

1. Upload a pdf copy of last financial year's LUT (if any).

1. Please fill in the name of two witnesses along with their address and occupation.

1. Next, you have to fill the place of filing. once this procedure is complete, you may preview the form

1. The application can be signed with a registered digital signature certificate or via an electronic verification code. Both options appear on the form. Once signed and submitted, the form cannot be edited.

1. You can download the letter of undertaking application from the GST portal.
   
   

Key things to remember

1. A LUT remains valid for the current financial year from the date of its submission. Example- If LUT was furnished in FY 2020-2021, then the date of expiry of the validity of such LUT is 31st March 2021. Therefore, you must file a fresh LUT for FY 2021-2022.

1. No bank guarantee is required in case of the letter of undertaking.

1. The LUT must be duly applied and signed by the authorised signatory of the company, firm, etc.
   
   
   

Created & Posted by Pooja

Income Tax Expert at TAXAJ

 

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you with a One-Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else, visit TAXAJ.

 

Watch all the Informational Videos here: YouTube Channel

 

TAXAJ Corporate Services LLP

Address: 1/11, 1st Floor, Sulahkul Vihar, Old Palam Road, Dwarka, Delhi-110078

Contact: 8961228919 ; 8802812345 | E-Mail: connect@taxaj.com