What is LUT Filing in GST?

LUT in GST: Full form/meaning is Letter of Undertaking. It is prescribed to be furnished in the form GST RFD 11 under rule 96 A, whereby the exporter declares that he or she will fulfill all the requirement that is prescribed under GST while exporting without making IGST payment.

Documents Required for LUT under GST

LUT cover letter - request for acceptance - duly signed by an authorized person

Copy of GST registration

PAN card of the entity

KYC of the authorized person/signatory

GST RFD11 form

Copy of the IEC code

Canceled Cheque

Authorized letter

Process For Filing LUT in GST.

To file a Letter of Undertaking (LUT) in a case where the exports are made without payment of taxes, below are the steps on how to file and furnish bonds when the exports are made without payment of taxes.

Check the furnishing and jurisdiction requirements. If a bond is to be filed, additional documents relating to the bank guarantee must be prepared.

Prepare necessary documents for Bonds. Following documents are to be filed for bonds:

For Bonds:

Form RFD-11
Bond on stamp paper
Bank guarantee
Authority letter
Other supporting documents

A separate bond is not needed to be furnished for each consignment. Instead, he can furnish a running bond. A running bond helps the exporter to carry forward the same terms and conditions in the bond for the next consignment.

A duplicate copy should be prepared along with an official document.

The next step is to submit the documents to the department and get the same verified by a relevant officer to avoid any rejection

After filing the document, a signed letter shall be issued by the officer acknowledging the same.

Eligibility for Filing LUT in GST.

Any registered taxpayer who is into exporting goods and services can make use of Letter of Undertaking. Any person who has been prosecuted for tax evasion for an amount of Rs. 250 lakh or above are ineligible.

The validity of such LUT's is for one year, and an exporter is required to furnish a fresh LUT for each financial year. If the conditions mentioned in the LUTs are not satisfied within the specified time limit, then the privileges will be revoked, and the exporter will have to furnish bonds.

Other assesses should furnish bonds if the export is being made without the payment of IGST. LUTs / Bonds can be used for:

1. Zero-rated supply to SEZ without payment of IGST
2. Export of goods to a country outside India without the payment of IGST.
3. It is providing services to a client in a country outside India without paying IGST.

Filing of Letter of Undertaking (FORM GST RFD-11)

The Form RFD-11 is filed in the format below:

Registered Name
Address
GST No.
Date of furnishing
Signature, date, and place
Details of witnesses (Name, address, and occupation)

Export Bond For GST.

Entities that are not eligible to submit a Letter of Undertaking based on the conditions mentioned will have to furnish an export bond and a bank guarantee. The applicant needs to cover the amount of tax involved in the export based on estimated tax liability self-assessment.

Export bond should be furnished on non-judicial stamp paper of the value as applicable in the State in which the bond is being furnished.

Also, exporters can furnish a running bond, so that export bond needs not to be executed for each export transaction. However, if the outstanding tax liability on exports exceeds the bond amount at any time, then the exporter must furnish a new bond to cover the additional liability.

A bank guarantee can be mandated along with an export bond. The value of the bank guarantee should usually not exceed 15% of the bond amount. However, based on the exporter's track record, the bank guarantee required to be submitted with the export bond can be waived off by the jurisdictional GST Commissioner.

Form for Bonds:

Registered Name
Address
Amount of bond furnished.
Date of furnishing.
Amount of bank guarantee furnished.
Signature, date, and place
Details of witnesses (Name, address, and occupation)