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GST LUT Filing

GST LUT (Letter of Undertaking) filing

Who has to furnish a Letter of Undertaking?

As per Rule 96A, any registered person availing the option to supply goods or services for export /SEZs without payment of integrated tax has to furnish, prior to export/SEZs supply, a Letter of Undertaking (LUT), if he has not been prosecuted for tax evasion for an amount of Rs 2.5 Crore or above under the CGST Act/IGST Act/Existing law.

The transactions for which LUT can be used are:

  • Zero rated supply to SEZ without payment of IGST.
  • Export of goods to a country outside India without payment of IGST.
  • Providing services to a client in a country outside India without payment of IGST.

Further, all registered taxpayers who have zero-rated supply of goods or services have to furnish LUT in Form GST RFD-11 on the GST Portal before affecting such supply.

Failing to furnish LUT, binds the exporter to pay the tax due along with the interest @18% as specified under Section 50(1) within,

  • 15 days after the expiry of three months, or further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the goods are not exported out of India.
  • 15 days after the expiry of one year, or further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment for such services is not received by the exporter in convertible foreign exchange or Indian Rupees, wherever permitted by the Reserve Bank of India.

Further more, after successful filing of GST RFD-11, system will generate ARN and acknowledgement. You will be informed about successful filing via SMS and Email and you can also download the acknowledgement as PDF.

What are the documents required for LUT filling under GST?

The documents required for LUT filling under Gst are as given below:

  • KYC documents of two witnesses
  • Nature of employment of witnesses

Copy of last year LUT (if any)

What is the process of filling LUT Certificate?

The process of filling of LUT Certificate is as follows:

  • First you have to login to GST portal for filing LUT certificate.
  • Under “SERVICE TAB”, select “USER SERVICES” drop down, has option of “FURNISH LETTER OF UNDERTAKING (LUT)”.
  • After selecting this option, you have to select the financial year for which you want to file Letter of Undertaking.
  • Then upload pdf copy of last financial year LUT (if any).
  • Fill the name of two witnesses along with their address and occupation.
  • Next you have to fill the place of filing. Once this procedure completes, you may preview the form.
  • The application can be signed with a registered digital signature certificate (DSC) or via electronic verification code (EVC). Both options appears on the form. Once signed and submitted, the form cannot be edited.

Further, primary authorized signatory/Any other Authorized Signatory needs to sign and file the verification with DSC/EVC. Authorized signatory can be the working partner, the managing director or the proprietor or by a person duly authorized by such working partner or Board of Directors of such company or proprietor to execute the form.

  • You can download the letter of undertaking application from the GST portal.

After successful filing, system will generate ARN and acknowledgement. You will be informed about successful filing via SMS and Email and you can also download the acknowledgement as PDF.

What are the various status of the LUT application filled by the taxpayer?

The list below provides the list of statuses of the LUT application in Form GST RFD-11 ARN, filed by the taxpayer:

  1. Submitted: Status of LUT application after Taxpayer submits the application successfully.
  2. Pending for Clarification: Status of LUT application after LUT Processing officer issues notice for seeking clarification.
  3. Pending for Order: Status of LUT application after Taxpayer submits the reply for notice within 15 working days Or Taxpayer does not submit the reply for notice after completion of 15 working days and then GST Portal changes the status from pending for clarification to pending for order.
  4. Approved: Status of LUT application after Tax Official accepts the undertaking furnished by Taxpayer.
  5. Rejected: Status of LUT application after Tax Official rejects the undertaking furnished by Taxpayer.
  6. Deemed Approved: Status of LUT application in case Tax Official doesn’t take any action within 3 working days.
  7. Expired:The LUT application status will change to Expired at the end of the respective FY.

 What are the benefits of filling LUT for exporters?

By opting for the LUT, an exporter can export goods or services without having any payment of taxes. However, if this option is not opted for by the exporter, he will have to pay taxes on their export and later claim a refund on the zero-rated exports.

A LUT in GST saves exporters the time and effort of requesting a refund and the risk of cash being blocked due to tax payments. Its filling may be completed entirely online, making it extremely quick and easy.

An LUT remains valid for the current financial year from its submission date.

No bank guarantee is required in case of a Letter of Undertaking.