Eligibility, Documents Required, Process of Filing of Letter of Undertaking (LUT) in GST

A Letter of Undertaking (LUT) is a document that exporters in India can file to export goods or services without payment of IGST (Integrated Goods and Services Tax). Here is the information on eligibility, documents required, and the process of filing an LUT in GST:

Eligibility for LUT filing:

The exporter must be a registered taxpayer under the Goods and Services Tax (GST) regime.

The exporter must have exported goods or services worth at least Rs. 1 crore or 10% of the turnover (whichever is lower) in the previous financial year.

Documents required:

A copy of the exporter's GST registration certificate.

A copy of the exporter's IEC (Import Export Code) certificate.

A declaration that the exporter has not been prosecuted for any offense under the GST Act or any other law.

Process of filing an LUT:

The exporter must first log in to the GST portal using their registered credentials.

Go to the "Services" tab and select "User Services."

Click on "Furnish Letter of Undertaking (LUT)" from the drop-down menu.

Fill in the required details in the form and upload the necessary documents.

Submit the application and receive an acknowledgement.

After submission of the LUT, the exporter can begin exporting goods or services without paying IGST.

It's important to note that the LUT must be filed before the exporter starts exporting goods or services without payment of IGST. Also, if the exporter's turnover falls below Rs. 1 crore or 10% of the turnover (whichever is lower), the exporter must furnish a bond in lieu of the LUT. The bond must be in the amount of 15% of the IGST payable on the exports.

‍

Who is required to submit LUT using GST RFD-11?

As per the GST (Goods and Services Tax) rules, registered taxpayers who wish to make exports without paying the Integrated Goods and Services Tax (IGST) can submit a Letter of Undertaking (LUT) in lieu of a bond. The LUT can be submitted using GST RFD-11 form.

The following entities are eligible to submit LUT using GST RFD-11:

1. Exporters: Registered taxpayers who undertake the export of goods or services without payment of IGST can submit LUT using GST RFD-11. To be eligible for LUT, the exporter should have a turnover of at least Rs. 1 crore in the preceding financial year or should have received a refund of IGST paid on exports in the previous financial year.

2. Status Holder: A status holder is an exporter who has been awarded status recognition by the Director General of Foreign Trade (DGFT). Status holders can submit LUT using GST RFD-11, irrespective of their turnover.

3. Export Oriented Unit (EOU) or a Special Economic Zone (SEZ) unit: An EOU or an SEZ unit that is registered as a taxpayer under the GST regime can submit LUT using GST RFD-11.

It's important to note that the LUT submitted using GST RFD-11 is valid for the financial year in which it is submitted and must be renewed before the start of every financial year. Also, the LUT can only be used for the export of goods or services and cannot be used for the supply of goods or services to the Domestic Tariff Area (DTA).

Submission of a Letter of Undertaking (FORM GST RFD-11)

To submit a Letter of Undertaking (LUT) using FORM GST RFD-11, follow these steps:

Step 1: Log in to the GST portal using your registered credentials.

Step 2: Go to the "Services" tab and select "User Services".

Step 3: Click on "Furnish Letter of Undertaking (LUT)" from the drop-down menu.

Step 4: Select the financial year for which you want to submit the LUT. If you have already submitted an LUT for the selected financial year, you will not be able to submit another LUT.

Step 5: Fill in the required details in the LUT form, including your name, address, GSTIN (Goods and Services Tax Identification Number), and the period of LUT.

Step 6: Upload the required documents, including a copy of your PAN (Permanent Account Number) card, a copy of your GST registration certificate, and a declaration stating that you have not been prosecuted for any offense under the GST Act or any other law.

Step 7: Review the information you have entered and make any necessary corrections.

Step 8: Click on the "Submit" button to complete the submission process.

Once you have submitted the LUT using FORM GST RFD-11, it will be processed by the GST department, and you will receive an acknowledgement confirming the submission. You can use this LUT for exports without payment of IGST for the financial year you have selected, provided you fulfill all the eligibility criteria. Remember to renew the LUT before the start of the next financial year.

Who is eligible to use a Letter of Undertaking (LUT)?

A Letter of Undertaking (LUT) is a document that enables registered taxpayers in India to export goods or services without payment of Integrated Goods and Services Tax (IGST). The following entities are eligible to use LUT for exports:

Exporters: Registered taxpayers who export goods or services can use LUT. However, to be eligible for LUT, the exporter must have a turnover of at least Rs. 1 crore in the preceding financial year or should have received a refund of IGST paid on exports in the previous financial year.

Status holders: An exporter who has been awarded status recognition by the Director General of Foreign Trade (DGFT) as a status holder can use LUT. The status holders can submit LUT irrespective of their turnover.

Export Oriented Unit (EOU) or a Special Economic Zone (SEZ) unit: An EOU or an SEZ unit that is registered as a taxpayer under the GST regime can use LUT.

It's important to note that if the entity does not meet the eligibility criteria for LUT, they would have to furnish a bond in lieu of the LUT, which will require a bank guarantee for 15% of the IGST amount payable on the export of goods or services. Also, the LUT can only be used for the export of goods or services and not for the supply of goods or services to the Domestic Tariff Area (DTA).