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Overview of GST LUT (Letter of Undertaking)
In recent years, GST laws have undergone significant changes to simplify India’s tax system. Initially, when GST was introduced in 2017, exporters had to pay Integrated Goods and Service Tax (IGST) upfront before getting a refund—a process that caused major cash flow issues. However, with Notification 37/2017, the government introduced a way out: the GST LUT.
A GST LUT (Letter of Undertaking) allows exporters to supply goods or services without paying IGST, provided certain conditions are met. This move has drastically simplified the export process and enhanced liquidity for businesses by eliminating the wait for tax refunds.
What is LUT?
A Letter of Undertaking (LUT) is an official document submitted by exporters in India to carry out exports without paying IGST. It is filed annually on the GST portal via Form GST RFD-11. Once approved, the LUT remains valid for the entire financial year.
LUTs are applicable in two key scenarios:
- Export of goods and services: Allows tax-free exports to countries outside India.
- Zero-rated supply to SEZs: Enables supplies to Special Economic Zones without GST.
Benefits of GST LUT Filing
Filing a GST LUT brings several advantages to exporters:
- Hassle-Free Exports: Avoid upfront tax payments and reduce cost of exports.
- Improved Cash Flow: Free up working capital otherwise tied in tax refunds.
- Reduced Compliance Burden: Eliminate the need for IGST filings on export invoices.
Requirements for GST LUT Filing
The following conditions must be fulfilled to file a LUT:
- GST Registration: The applicant must be a registered taxpayer under GST.
- Export Intent: The applicant should intend to export goods or services, either abroad or to SEZs.
- No Major Tax Evasion Cases: Applicants must not have been prosecuted for tax evasion exceeding ₹2.5 crores.
Eligibility Criteria for GST LUT Filing
Businesses must meet the following eligibility criteria:
- Registered GST Entity: Only GST-registered taxpayers can apply for LUT.
- Compliant with GST Filings: Applicants must be up-to-date with all GST returns and payments.
- No Large-Scale Offenses: The applicant must not have any serious GST violations or ongoing prosecution exceeding ₹2.5 crores.
- Non-Casual Taxpayer: Casual and non-resident taxpayers are ineligible and must provide a bank guarantee instead.
Filing a GST LUT enables seamless tax-free exports and plays a pivotal role in supporting India’s growing export economy.
Documents Required for GST LUT Filing
Filing a GST LUT (Letter of Undertaking) requires the submission of certain essential documents to ensure smooth processing and compliance. Below is the list of key documents needed for GST LUT filing:
- GST Registration Certificate: A copy of the GST registration certificate to verify that the applicant is a registered taxpayer under the GST system.
- PAN Card: A copy of the applicant’s Permanent Account Number (PAN) card, whether for an individual, company, or firm, used for identification purposes.
- Export Details: Information about the export of goods or services, including details such as business nature and export turnover.
- LUT Cover Letter: A request letter signed by an authorized representative, seeking acceptance of the GST LUT.
- Bank Details: Bank account details such as a cancelled cheque or recent bank statement to verify the applicant's business account.
- GST RFD-11 Form: The form, available on the GST portal, must be filled out and submitted for LUT filing.
- IEC Code: A copy of the Importer Exporter Code (IEC) license to confirm eligibility for international trade.
- Authorization Letter: A letter of authorization for the signing of the LUT, in cases where the business owner or director is not signing it personally.
- Board Resolution/Partnership Deed: If the applicant is a company or a partnership firm, a copy of the board resolution (for companies) or partnership deed (for partnership firms) authorizing the LUT application may be required.
- Declaration: A self-declaration by the applicant confirming compliance with GST provisions and the absence of any outstanding tax dues or pending filings.
- Other Documents (if required): Depending on the nature of the business, the GST authorities may request additional documents.
Checklist for GST LUT Filing
To ensure a hassle-free GST LUT filing process, follow this comprehensive checklist to make sure all requirements are met:
- Registered GST Number: Ensure that you have a valid GST registration number.
- Importer Exporter Code (IEC): Copy of the IEC code.
- LUT Cover Letter: Signed by an authorized person.
- Duly filled GST RFD-11 form: Available on the GST portal.
- GST Registration Certificate: Copy of the certificate.
- KYC Documents for Authorized Signatory: Complete documents for the person who will sign the LUT.
- Bank Details: Cancelled cheque or bank statement for export transactions.
- Authorization Letter: For signing of the LUT, if not done by the business owner or director.
By ensuring all the required documents are prepared and completing the checklist, businesses can streamline the GST LUT filing process and enjoy the benefits of tax-free exports.
Process of GST LUT Filing Online
Filing a GST LUT (Letter of Undertaking) online is a straightforward process, designed to simplify the export process for businesses. Below is a step-by-step guide on how to file the GST LUT online:
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Access the GST Website
Log in to your GST account on the official GST portal using your credentials.
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Navigate to the LUT Section
In the menu, go to "Services" > "User Services" > "Furnish Letter of Undertaking" to start the filing process.
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Select the Financial Year
Choose the financial year for which you are filing the LUT. Ensure the year is correct to avoid any discrepancies.
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Attach Previous LUT (If Applicable)
If you have filed an LUT previously, you can attach the old LUT by clicking the "Choose File" option.
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Complete the LUT Form
Fill in the required details, such as the commitment to export goods within three months, compliance with GST laws, and agreement to pay IGST with interest in case of non-export.
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Provide Witness Details
Enter the names, job titles, and addresses of two witnesses for the LUT.
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Sign the LUT
The LUT can be signed by the business owner or an authorized representative, such as a partner, managing director, or company secretary. Use a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC) to sign.
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Submit the LUT
Click "Sign and File with DSC" or "Sign and File with EVC" to submit your LUT online.
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Receive Confirmation
After submission, you will receive an Application Reference Number (ARN) via email and SMS, confirming your LUT filing.
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Track the Progress
You can check the status of your LUT by visiting "Services" > "User Services" > "View My Submitted LUTs" on the GST portal.
Renewal of GST LUT Filing
GST LUT is valid for one year, and to continue benefiting from tax-free exports, businesses must renew the LUT before the end of each financial year. The renewal process is simple and can be done online through the GST portal:
- Log in to the GST portal and navigate to "Furnish LUT" under "User Services".
- Select the financial year for renewal and upload the previous LUT, if applicable.
- Verify the details, provide witness information, and ensure the LUT is signed by an authorized person.
- Submit the renewed LUT online with a digital signature using DSC or EVC.
Why Choose Kanakkupillai for GST LUT Filing?
Kanakkupillai is a trusted service provider for GST Letter of Undertaking filing in India, offering unparalleled expertise and convenience. Here's why businesses choose us:
- Experienced Professionals: Our team of experts guides you through the GST LUT filing process to ensure compliance and security.
- Simplified Registration Process: We make the entire filing process simple, saving you time while ensuring that all requirements are met.
- Dedicated Support: Our customer support team is available at every step, providing you with prompt and efficient assistance.
- Reliable Partner for GST Needs: Kanakkupillai is a trusted name, known for its reliable and efficient services in handling GST-related matters.
Choose Kanakkupillai as your partner for GST LUT filing and enjoy a seamless experience backed by our expertise, reliability, and commitment to your success.
Frequently Asked Questions
What is a GST LUT (Letter of Undertaking)?
A GST LUT is a record that lets named users make trades without the payment of Integrated Goods and Services Tax (IGST). It improves the shipping process and helps companies control their working capital.Who is allowed to apply for a GST LUT?
Registered people interested in selling goods or services are eligible to apply for a GST LUT, given they have not been in trial for tax cheating topping Rs. 250 lakhs.What are the key perks of a GST LUT?
The major benefits of a GST LUT include hassle-free exports, working capital optimization, reduced paperwork load, and better competitiveness in the global market.What papers are needed for GST LUT filing?
The key papers needed include a LUT cover letter, GST registration and KYC, GST RFD-11 form, IEC code, cancelled cheque, and a clearance letter (if relevant).How can I file a GST LUT online?
The online GST LUT filing method includes opening the GST site, picking the financial year, adding the previous LUT (if any), finishing the form, providing witness information, signing the LUT, and sending it.What is the law of a GST LUT?
A GST LUT is good for the full financial year in which it is filed. Businesses must update their LUT before the end of each financial year to continue having the perks.What are the legal guidelines for a GST LUT?
Key compliance requirements include annual entry of the LUT, checking qualifying criteria, making the necessary papers, and filing the LUT online in a prompt way.Can small exporters also ask for a GST LUT?
Yes, there is no limit for small makers to submit a GST LUT, as long as they meet the filing conditions.What happens if I dont update my GST LUT on time?
Failure to update the GST LUT before the end of the financial year can lead to delays in your export operations and non-compliance with GST rules.Why should I choose Kanakkupillai for GST LUT services?
Kanakkupillai gives understanding, reliability, and excellent customer service in GST LUT filing, ensuring a smooth and legal experience for business.We Provide Best Quality
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