The Comprehensive Guide to Filing a Letter of Undertaking in GST for Small Business Owners and Startup Founders in India

Any business owner registered under the Goods and Services Tax (GST) in India is required to file a return. A Letter of Undertaking (LUT) is a document that exempts exporters from paying the integrated goods and services tax (IGST) on exported goods. In this guide, we will explain the eligibility, documents required, and process of filing a Letter of Undertaking in GST for small and medium business owners and startup founders in India.

Eligibility for Filing LUT in GST

Exporters registered under GST are eligible to file an LUT if they have exported goods worth at least INR 1 crore in the previous financial year or expect to export goods worth at least INR 1 crore in the current financial year. Only those exporters who meet this criterion are eligible to file an LUT in GST.

Documents Required for Filing LUT in GST

Exporters who wish to file an LUT in GST must provide the following documents:

Copy of the company's Permanent Account Number (PAN)
Copy of the GST registration certificate
Copy of the company's bank statement for the previous financial year
Copy of the invoice of the previous year's exports
Undertaking letter on the company's letterhead stating that the company has not been prosecuted for tax evasion in the last five years and that the company accepts the terms and conditions of LUT

All documents must be self-attested by an authorized signatory of the company. The LUT must be filed on the GST portal.

Process of Filing LUT in GST

Follow these steps to file an LUT in GST:

Log in to the GST portal with your credentials.
Select "Services" from the menu and click on "User Services."
Click on "Furnish Letter of Undertaking (LUT)."
Fill in the required details such as the financial year, the legal name of the company, the name of the authorized signatory, and the details of the bank account.
Upload the self-attested copies of the required documents.
Submit the LUT.
Once the LUT is approved, it will be available for download on the GST portal.

In case the LUT is rejected, you will receive a message on your registered mobile number and email address, and you will have to file a bond instead of an LUT.

Conclusion

Exporters registered under GST in India can benefit from the exemption of IGST on exported goods by filing a Letter of Undertaking. Business owners must meet the eligibility criteria and provide the required documents to file an LUT. The process of filing an LUT is straightforward and can be done online through the GST portal. By following the steps outlined in this guide, small and medium business owners and startup founders in India can easily file an LUT and take advantage of the tax exemption on exported goods.