Letter of Undertaking under GST

File the Letter of Undertaking that guarantees tax savings before the exports.

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What is Letter of Undertaking?

Letter of Undertaking (LUT) is a document submitted by exporters to ship goods or services without paying taxes upfront. If an exporter does not file an LUT, they must pay IGST first and then claim a refund. Filing an LUT is more convenient as it avoids refund hassles and fund blockage. The eligibility criteria for LUT are relatively relaxed compared to the previous system.

LUT is filed online using form GST RFD-11. By submitting the LUT, the exporter commits to fulfilling all prescribed requirements for this process.

Benefits of Filing LUT Under GST

Exports Without Tax Payment

By filing an LUT under GST, exporters can ship goods or services without paying taxes upfront. If the LUT is not filed, the exporter must pay the applicable tax at the time of export and later claim a refund to benefit from zero-rated exports.

Saves Working Capital

Regular exporters greatly benefit from filing LUT online, as it avoids the lengthy refund process under the alternative route. This prevents capital from being tied up in pending refunds, allowing funds to be used for other business needs and reducing the overall cost of exports.

An Entire Financial Year Validity

Once filed, the Letter of Undertaking (LUT) remains valid for the entire financial year, eliminating the need to repeat procedural formalities for each export shipment.

Simple and online process

Since April 2018, both filing and acceptance of the LUT are done entirely online. Applicants can complete the process remotely by submitting a few required documents, without needing to visit any office.

Documents required for LUT filing

Entity’s PAN Card

A Copy of PAN card of the exporter entity

KYC of Authorised Signatory

A Copy of PAN card and Aadhar card of partners/directors

Witnesses

Information of at least two witnesses along with the address proof and PAN

GST Registration

GST Registration Certificate of the exporter is required

IEC Certificate

The IEC certificate must be submitted

Cancelled cheque

A Copy of cancelled cheque of current account of exporter

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File Your LUT in 3 Easy Steps

1. Answer Quick Questions

2. Experts are Here to Help

3. Letter of Undertaking is filed

*Subject to government processing times.

Process of filing LUT under GST

Day 1 - Collection

Day 3-4 - Execution

Day 5 - Acknowledgement

Explore Letter of Undertaking under GST

Frequently Asked Questions

What are the key requirements/factors for registering an LLP?

Exports of goods and services are done either with the payment of applicable GST or without the payment of GST. In the first portion, the taxes paid are refunded to exporters subject to conditions of exports. For exports without payment of taxes, the exporters are required to file Letter of Undertaking.

When is the Letter of Undertaking required to be filed?

If the exporters wish to opt for exports without the payment of taxes, the Letter of Undertaking is required to be filed. First time filing can be made any time before exporting without taxes. However, if the exporter wants to continue the same to the next financial year, it must be filed before the commencement of the financial year.

Who is eligible to file Letter of Undertaking?

Earlier criteria of turnover and inward receipts were prescribed for filing LUT under GST. However, now any exporter willing to export without paying the taxes can file Letter of Undertaking under GST online.

Whether the filing of bond is required for exporters?

No, the requirement to file a bond is eliminated. For exports without payment of taxes, online Letter of Undertaking is required to be filed.

How the letter of Undertaking is required to be filed under GST?

Since the financial year 2018-19, the Letter of Undertaking is required to be filed on an online portal of GST Network using GST credentials. The undertaking is executed on the duly stamped paper, which is submitted through the online portal.

What is the validity of Letter of Undertaking filed?

Letter of Undertaking will be valid for the whole financial year in which it is filed. However, if the conditions with respect to exports are not fulfilled, LUT is deemed to be withdrawn until the fulfillment of conditions.

Whether the manual submission of LUT is required?

No, the physical submission of Letter of Undertaking is not required now as the ARN generated in the Acknowledgment is deemed as acceptance of the LUT.

Whether re-filing of LUT is required to continue the benefit?

Yes, the Letter of Undertaking is valid for the financial year in which it is filed. Hence, the LUT must be applied for in the beginning of every financial year.

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