GST LUT Filing

In the following article, we will be discussing about the knowledge you need to acquire regarding GST LUT filing,

What is GST LUT filing?

LUT stands for Letter of Undertaking. According to the CGST Act, 2017, it is the document that is required to be filed by exporters to export goods or services such that they don’t have to pay the taxes. All exports are a subject to IGST under the new GST system, in which it can be reclaimed later by a refund against the paid tax. Having difficulties faced by exporters in processing tax refunds, an alternative option of LUT eases their efforts by eliminating blocking of funds.

Who can apply for LUT?

As per CGST Rules, 2017, a registered person can file LUT in form GST RFD-11 and export goods without paying IGST. LUT can be applied if they:

  • Supply goods or services to India or Overseas or SEZs
  • Are registered under GST
  • Want to supply goods without paying IGST

When and how to file an LUT?

  • LUT is to be filed online before the export of goods or services. The scenario before GST was that the exporters had to manually submit the filled and signed RFD-11 on Business Letterhead. But now it can be filed online making it convenient & easy.
  • One of the copies of the same is to be sent to the Jurisdictional Deputy or Assistant Commissioner who has the lead jurisdiction over the place where the export documents’ verification occurs through ICEGATE medium.
  • Another copy is sent to the Customs clearing authority along with the Export documents.

Documents required for LUT

  • An LUT can be submitted by anyone registered under GST, only if they have not been accused for tax elusion exceeding Rs. 250 lakhs, or for any other offence under the CGST Act, the IGST Act 2017, or any other currently predominating laws
  • LUT cover letter requesting for acceptance, that has been signed by an authorized person
  • KYC of the authorized person
  • Authorized letter
  • Pan card of the applicant
  • GST RFD-11 form
  • Cancelled cheque
  • Copy of GST Registration
  • Copy of IEC Code

Process of LUT filing

After logging into your profile on the GST portal, follow these steps:

  • Under the ‘Services’ tab, the option of ‘Furnish Letter of Undertaking (LUT)’ is found under the ‘User Services’ drop-down menu which is to be selected.
  • After the prior selection, the financial year is to be selected. The manually filled LUT can be uploaded as well, in JPEG or PDF format.
  • Next, the self-declaration form is to be filled under which one undertakes the completion of the export of goods or services within three months of the issuing date of export invoice, or such further period as allotted by the Commissioner; adherence to the GST Laws and payment of the IGST along with interest at the rate of 18% from the invoice date to the date of payment of IGST in case of failure to export.
  • The names of two independent witnesses along with their occupations and addresses are to be filled.
  • Next, the place of filing is to be entered. The form can be previewed.
  • The application is to be signed with either a registered digital signature certificate or by electronic verification code. Both the options are available on the form. Once signed and submitted, the form is not editable.
  • The form can then be downloaded.

Benefits of filing LUT

The benefits are:

  • While exporting goods, the exporter won’t have to pay the taxes.
  • LUT allows the exporters to not have to go through the trouble of claiming a refund or catching up with the GST department. This leads to saving of time.
  • Due to the online conduction of the process and it being active for the whole financial year after the filing, it gets easier for regular exporters, since they don’t have to get stuck with tax refunds.

Key Points regarding LUT

  • An LUT remains valid for 12 months from the date of submission.
  • LUT is accepted subject to some conditions. Failing to comply these can lead to revocation of the privileges associated with the document.
  • LUT is required to be filed on the letterhead.
  • LUT can be filed by MD, CS, Partner or any authorised person.
  • The bank guarantee accompanying the bond should not exceed 15% of the bond amount.

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