Letter of Undertaking under GST
File the Letter of Undertaking that guarantees tax savings before the exports.
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- OverviewOverview
- BenefitsBenefits
- Documents RequiredDocuments Required
- Registration ProcedureRegistration Procedure
- FAQFAQ
What is Letter of Undertaking?
Letter of Undertaking is abbreviated as LUT. The Letter of Undertaking is a document submitted by the exporter in order to export goods or services without the payment of taxes. In case the LUT is not filed, the exporter may export by payment of IGST and then claim the refund of tax paid. Filing LUT is convenient than refund mode as the exporters do not wish to indulge into hassles of refunds and block their funds. The eligibility criteria to apply for LUT is comparatively relaxed than to the erstwhile system.
Letter of Undertaking is filed online using the form GST RFD 11. By filing LUT, the exporter undertakes that all the requirements prescribed for this route will be fulfilled by him.
BENEFITS
Benefits of filing LUT under GST
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.
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.
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.
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.
DOCUMENTS CHECKLIST
Documents required for LUT filing
Entity’s PAN Card
A Copy of PAN card of the exporter entity
KYC of Authorised Signatory
A Copy of PAN card and Aadhar card of partners/directors
Witnesses
Information of at least two witnesses along with the address proof and PAN
GST Registration
GST Registration Certificate of the exporter is required
IEC Certificate
The IEC certificate must be submitted
Cancelled cheque
A Copy of cancelled cheque of current account of exporter
File LUT in 3 easy steps
Process of filing LUT under GST
Explore Letter of Undertaking under GST
Exports of goods and services are done either with the payment of applicable GST or without the payment of GST. In the first portion, the taxes paid are refunded to exporters subject to conditions of exports. For exports without payment of taxes, the exporters are required to file Letter of Undertaking.
If the exporters wish to opt for exports without the payment of taxes, the Letter of Undertaking is required to be filed. First time filing can be made any time before exporting without taxes. However, if the exporter wants to continue the same to the next financial year, it must be filed before the commencement of the financial year.
Earlier criteria of turnover and inward receipts were prescribed for filing LUT under GST. However, now any exporter willing to export without paying the taxes can file Letter of Undertaking under GST online.
No, the requirement to file a bond is eliminated. For exports without payment of taxes, online Letter of Undertaking is required to be filed.
Since the financial year 2018-19, the Letter of Undertaking is required to be filed on an online portal of GST Network using GST credentials. The undertaking is executed on the duly stamped paper, which is submitted through the online portal.
Letter of Undertaking will be valid for the whole financial year in which it is filed. However, if the conditions with respect to exports are not fulfilled, LUT is deemed to be withdrawn until the fulfillment of conditions.
No, the physical submission of Letter of Undertaking is not required now as the ARN generated in the Acknowledgment is deemed as acceptance of the LUT.
Yes, the Letter of Undertaking is valid for the financial year in which it is filed. Hence, the LUT must be applied for in the beginning of every financial year.
