GST LUT Filing
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A Guide to the Letter of Undertaking in GST
The Letter of Undertaking (LUT) under the Goods and Services Tax Act, of 2017, helps exporters streamline their export operations and is mandated under Rule 96A of the Act. It allows eligible exporters to supply goods or services for export without the upfront payment of Integrated Goods and Services Tax (IGST). However, this option is not available for all exporters.
What Is LUT Eligibility Criteria?
Only the exporters meeting the eligibility criteria can opt for GST LUT Filing.
- Businesses registered under GST can file an LUT.
- Businesses involved in exporting goods or services to countries outside India or to Special Economic Zones (SEZs).
- The business must not have a history of prosecution for tax evasion exceeding Rs. 2.5 crore under the CGST Act, IGST Act or any previous tax law.
A 7-Step Process for Filing LUT in GST
Filing LUT in GST is a simple process that requires a few documents.
Step 1:
Visit the official GST portal .
Step 2:
Login and locate the ‘Services’ tab on the homepage.
Step 3:
Click on ‘Furnish Letter of Undertaking (LUT)’ under the ‘Services’ section.
Step 4:
Select the appropriate type of LUT in GST.
Step 5:
Enter the required details in the online form, including your GSTIN, the financial year for which LUT applies and details of two independent witnesses (name, address and occupation).
Step 6:
You have to complete a self-declaration by ticking against the applicable checkboxes.
Step 7:
Your document will be shown in PDF format and you have to sign it electronically. Once everything is accurate, proceed with submission.
You will get a confirmation message upon a successful GST return filing and you can download a formal receipt for your records.
Documents for GST LUT Filing
- GST Registration Certificate (GSTIN)
- PAN Card
- Copy of IEC Code
- Director/Proprietor KYC Documents
- A cancelled cheque
- Security Deposit Challan (if applicable)
- LUT Cover Letter signed by an authorised person.
- Letter from an authorised person.
- GST RFD 11 Form
If you have all these documents, you may proceed to the GST LUT Filing process.
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Importance of Letter of Undertaking
- A LUT offers faster clearance due to no upfront IGST payment.
- It reduces the compliance burden
- It enhances Working Capital Management
- It helps offer competitive pricing in the international market
- Indian exports can be attractive to foreign buyers due to overall efficiency gains.
Final Words
LUT is particularly beneficial for exporters with high-volume exports or those dealing with perishable goods where time management is prioritised. Moreover, filing of the Letter of Undertaking comes with the responsibility of fulfilling export obligations. This registration process should be done carefully to avoid errors, delays or penalties and a dependable tax consultant will help you with it.
FAQs
What is the LUT Certificate Download Process?
An LUT certificate download can be done via the GST portal. For that, you may either track your application status or view submitted LUTs to find the specific LUT you want to download.
What Should I Remember While Applying for a Letter of Undertaking?
Remember that the Letter of Undertaking will be valid for a year and you must fill out the GST RFD-11 form to apply for the same. This letter comes with other compliances and failure to meet them results in penalties.
What Are the Various Statuses of the LUT Application Mentioned on the GST Portal?
Various statuses of the LUT application mentioned on the GST portal are: pending for clarification, Pending for order (after providing a clarification), submitted, approved, rejected, expired and deemed approved (when your application remains untouched by the tax officer for 3 days).
Who Should Sign the LUT Application?
An authorised signatory such as the managing director, proprietor, working partner, etc should sign the LUT application via DSC or EVC.
When to Apply for an LUT?
Applying for a LUT would be appropriate in the case of frequent exports, High-Volume Exports, perishable goods and businesses seeking to improve cash flow.
