Letter of Undertaking is commonly known as LUT. The Letter of Undertaking (LUT) is guided to be equipped in form GST RFD 11 under rule 96A, whereby the person involved in exporting business claims that he/she would meet all the requirements prescribed under GST while exporting without making IGST payment.
Filing Letter of Undertaking is compulsory to export goods and services without payment of Integrated Taxes. If LUT has not been appointed, the export can only be made through payment of IGST or by furnishing an export bond. Apply online Letter of Undertaking LUT certificate on Jan Gst Kendra
There is much compliance which a company needs to follow; however, we would like to discuss few most important aspects about the bond and LUT filings :
No Taxes : If LUT or bond is filed, and then no taxes are required to be paid on exports.
Filings : The filing needs to be done manually and there is no online portal.
Annual : You need to visit tax dept. and submit the documents at regular intervals.
Once the application is accepted by the tax department, you need to submit the export documents to the tax department on regular basis. You can file the documents either on monthly, quarterly or on every shipment. This is because your application is generally valid for one year and needs to be renewed each year. Therefore, if you do not renew the bond or LUT, then you shall become ineligible to export without payment of tax.
All GST registered goods and service exporters are eligible to submit LUT except the exporters who have been prosecuted for any offence and the amount of tax evasion exceeds Rs.250 lakhs under the CGST Act or the Integrated Goods and Services Tax Act,2017 or any of the existing laws.In such cases, where the exporter is not eligible to file LUT, they would have to furnish an export bond
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