LUT under GST

Inquire for letter-of-undertaking !!


letter-of-undertaking in India

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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 96A, whereby the exporter declares that he/she would fulfil all the requirements prescribed under GST while exporting without making IGST payment.

Filing Letter of Undertaking is mandatory to export goods or service or both without payment of Integrated Taxes (IGST). If LUT has not been furnished, the export can only be made through payment of IGST or by furnishing an export bond Initially, only the options of export bond was allowed. However, to improve ease of doing business, the Government introduced LUT. LUT was to be filed offline at the concerned GST office. Now, the Government has made the process of filing GST LUT online. Now, exporters can file LUT online through their respective GST Portal account easily by following the steps below.

Eligibility for Export under LUT

All GST registered goods and service exporters are eligible to submit LUT except the exporters who have been prosecuted for any offence and the amount of tax evasion exceeds Rs.250 lakhs under the CGST Act or the Integrated Goods and Services Tax Act,2017 or any of the existing laws.

In such cases, where the exporter is not eligible to file LUT, they would have to furnish an export bond..

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Procedure for Filing Online LUT under GST

As mentioned above, filing of LUT has been made online through the GST Portal. You can follow the steps below to file LUT online:

  • Now, Form GST RFD-11 is displayed..
  • Login to the GST Portal with valid credentials.
  • Select the Financial Year for which period you want to furnish the LUT.
  • You can also upload LUT that belong to an earlier period by clicking on the choose file option and uploading the LUT file
  • If you have already furnished LUT Offline, for previous period, please attach the same here and continue to file your application.
  • If you’re filing LUT, please read and select all the three check boxes for accepting the conditions prescribed in Letter of Undertaking.
  • Go to menu bar and select ‘Service’ option. Under ‘Service’ option go to ‘User Service’ option’ and select the Tab “Furnishing Letter of Undertaking”.
  • You can click the PREVIEW button to preview the form.
  • In the Place field, enter the place where the form is filed.
  • Click the SIGN AND FILE WITH DSC or SIGN AND FILE WITH EVC button..
  • You can click the SAVE button to save the form and retrieve later.
  • Once signed and filed, Form cannot be edited. Kindly recheck at least once before signing and submitting.
  • In name, address and occupation of the independent witnesses section, enter name and address of two witness.
  • Next step is to select name of Primary Authorized signatory or other Authorized signatory who will sign the Application form.

EXPORT BOND

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Entities not eligible to submit Letter of Undertaking as per the conditions mentioned above would have to furnish an export bond along with bank guarantee. The bond should cover the amount of tax involved in the export based on estimated tax liability as assessed by the exporter himself. 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 need not be executed for each and every export transaction. However, if the outstanding tax liability on exports exceeds the bond amount at any time, then the exporter must furnish a fresh bond to cover the additional liability

Export bonds and letter of undertaking can be submitted to the jurisdictional Deputy Commissioner or Assistant Commissioner of the concerned jurisdiction. However, once FORM RFD-11 is made live on the GST Portal, the document can be submitted online.

Bank Guarantee for Export Bond

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

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