If you are an exporter aiming to streamline your business processes then the GST LUT Form is a crucial document that allows you to smoothly handle your export transactions without having to pay Integrated Goods and Services Tax (IGST) when supplying goods or services.
What is the GST LUT Form?
A Letter of Undertaking (LUT) is a document where the user confirms that all GST obligations have been fulfilled. It is required when exporting goods, services, or both without paying IGST. According to Notification No. 37/2017 – Central Tax, providing an LUT is essential for IGST-free exports. If an exporter does not submit the LUT, they must either pay the IGST or submit an export bond. Previously, LUTs could only be submitted in person at the designated GST office. However, the government has simplified the LUT filing process by making it accessible online.
Tax-Free Exports: When you opt for the LUT, you can conduct your export business without immediately paying taxes. This is different from the alternative, where you pay taxes first and then wait for refunds in the case of zero-rated exports.
Simplified Process: Using the LUT means you don't have to deal with the complexities of claiming tax refunds or follow-ups with tax authorities. This saves you time and makes your operations smoother.
Freeing Up Working Capital: The money you would have had to lock away as tax payments can now be used for your business. This is especially helpful for small and medium-sized businesses that often face financing and working capital challenges.
Efficient Resource Use: Regular exporters benefit from the LUT's long validity – it's valid for the entire financial year. This reduces the need for repetitive filings, allowing you to focus on your core business activities.
To apply for a Letter of Undertaking (LUT), you need to meet these criteria:
Registered Exporter: Any registered taxpayer involved in exporting goods and services can use the LUT. However, if you're facing prosecution for tax evasion exceeding Rs. 250 lakh or more, you can't use this option.
Supply Intent: You should plan to supply goods or services within India, to foreign countries, or to Special Economic Zones (SEZs).
GST Registration: You must be registered under the GST framework.
Tax-Free Supply: You should want to supply goods without having to pay integrated tax.
Tax & Process
Step 1: Log in to the GST Portal.
Step 2: Select 'Furnish Letter of Undertaking (LUT)' from the 'SERVICES' tab > 'User Services'.
Step 3: Choose the financial year for the Letter of Undertaking. If you've submitted it manually for a prior period, upload it.
Step 4: Fill in the information on the Letter of Undertaking Form/GST RFD-11. Mark self-declaration boxes, and provide witness details.
Step 5: Save and preview the form for accuracy.
Step 6: Sign and submit the form with a Digital Signature Certificate (DSC) or via OTP (EVC).
You will receive an Application Reference Number (ARN) upon submission, which can be downloaded. You can also view submitted LUTs under 'User Services' > 'View my Submitted LUTs'.
LUT Cover Letter: A request letter signed by an authorized person.
Eligibility Check: Make sure you meet the eligibility criteria (no serious tax evasion cases).
GST Registration Proof: Evidence of your GST registration.
Entity's PAN Card: Identification using the PAN card of the entity.
KYC of Authorized Person: ID and address proof of the authorized person.
GST RFD 11 Form: The application form for the LUT.
Copy of IEC Code: If you're engaged in exports.
Canceled Cheque: From your linked bank account.
Authorization Letter: Granting authority to the authorized signatory.
Is it possible to view the LUT application after filing?
Yes, the Taxpayer will be able to see his LUT after filing.
Is it mandatory to file GST LUT?
It is mandatory to furnish the Letter of Undertaking (LUT) to export the goods, services, or both without paying the IGST.
What happens when the exporter fails to furnish the LUT?
In case if the exporter fails to provide the LUT then he has to pay the IGST or furnish an export bond.
Who is eligible to furnish LUT under GST?
Any person who is exporting goods or services can furnish the LUT.
Who is not eligible to furnish under GST?
A person who has been prosecuted for evading tax of Rs. 2.5 crore or above under the act cannot furnish the LUT.