GST LUT Filing

About Partnership GST LUT Filing 

 

Are you an exporter looking to simplify your business operations? The GST LUT Form is an essential document that enables you to seamlessly conduct your export transactions without paying Integrated Goods and Services Tax (IGST) at the time of supply. Comfile is here to assist you in efficiently completing the GST LUT Form filing process, making your export journey smoother than ever.

LUT, an acronym for Letter of Undertaking holds significant relevance within the context of the Goods and Services Tax (GST) framework. This document serves as a powerful tool for exporters, allowing them to engage in the export of goods or services without the obligation of immediate tax payment.

For all registered taxpayers engaged in the export of goods or services, it is mandatory to provide a Letter of Undertaking (LUT) using the Form GST RFD-11 form on the GST portal. This obligation is essential to facilitate exports without paying Integrated Goods and Services Tax (IGST).

The Eligibility criteria for applying for a LUT include the following:

The Letter of Undertaking (LUT) is open for utilization by any registered taxpayer engaged in exporting goods and services. However, individuals facing prosecution for tax evasion exceeding Rs. 250 lakh or more are ineligible to benefit from this option.

  • Intent to Supply: The applicant should intend to supply goods or services within India, to foreign countries, or to Special Economic Zones (SEZs).
  • GST Registration: The entity seeking to avail the benefits of an LUT should be registered under the GST framework.
  • Tax-Free Supply: The desire to supply goods without the imposition of integrated tax is an essential requirement for LUT application.

LUTs hold a validity of one year, necessitating the submission of a fresh LUT for each subsequent financial year. Should the terms outlined in the LUT fail to be met within the designated timeframe; the privileges associated with it will be withdrawn, prompting the need for the exporter to provide bonds.

For other assessments, bonds are required when conducting exports without Integrated Goods and Services Tax (IGST) payment. LUTs and bonds are applicable in the following cases:

  • Zero-rated supply to SEZ: Exporting to Special Economic Zones (SEZs) without IGST payment.
  • Goods Export: Exporting goods to a country beyond India without IGST payment.
  • Service Export: Providing services to clients in foreign countries without IGST payment.

To apply for a Letter of Undertaking (LUT) under GST, you’ll need the following documents:

  • LUT Cover Letter: A request letter signed by an authorized person.
  • Eligibility: Ensure you meet eligibility criteria (no serious tax evasion cases).
  • Copy of GST Registration: Proof of your GST registration.
  • PAN Card of Entity: Identification using PAN card.
  • KYC of Authorized Person: ID and address proof of authorized person.
  • GST RFD 11 Form: Application form for LUT.
  • Copy of IEC Code: If involved in exports.
  • Canceled Cheque: From your associated bank account.
  • Authorized Letter: Granting power to the authorized signatory.

Choosing to file a Letter of Undertaking (LUT) brings a host of benefits to exporters, streamlining their export activities and optimizing their financial operations:

  • Tax-Free Export: Opting for the LUT enables exporters to carry out their export transactions without the burden of immediate tax payment. This contrasts the alternative, where taxes are paid and later claimed as refunds for zero-rated exports.
  • Simplified Process: By utilizing the LUT, exporters avoid the complexities of claiming tax refunds or engaging in follow-ups with the tax authorities. This translates to substantial time savings and operational ease.
  • Unblocked Working Capital: Funds that would have otherwise been locked as tax payments remain accessible for exporters. This is especially vital for small and medium-sized enterprises (SMEs) grappling with financing and working capital constraints.
  • Liberated Resources: Regular exporters find a consistent advantage with the LUT. Once filed, the LUT remains valid for the entire financial year. This longevity minimizes the need for repetitive filings, allowing exporters to focus on their core activities.

By leveraging the benefits of the LUT, exporters can navigate the realm of international trade with greater efficiency and flexibility

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Here are some crucial points to keep in mind regarding LUTs (Letter of Undertaking) in GST:

  • Validity Period: An LUT remains valid for a year, starting from the submission date.
  • Conditional Acceptance: The acceptance of an LUT comes with specific terms. Failing to meet these conditions might lead to privilege revocation. In such cases, an entity may need to provide a bond.
  • Alternative Bonding: Entities ineligible for LUT can still furnish a bond. This bond, usually on non-judicial stamp paper, requires a bank guarantee. The adhesive should cover the anticipated tax liability based on exporter assessment.
  • Official Letterhead: LUT submissions must be on the registered entity’s letterhead. This letterhead is from the entity planning to supply goods/services without integrated tax payment.
  • Prescribed Form: An LUT must be applied through the official GST RFD-11 form. This form can be submitted by authorized personnel like the MD, company secretary, or partners in a firm.
  • Flexible Filing: In the case of a company, the form can be submitted by a partner in a partnership firm or the proprietor.
  • Bank Guarantee Limit: The accompanying bank guarantee should be at most 15% of the bond amount. The jurisdictional GST Commissioner might waive this requirement.

 

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  • LUT Filing for One Financial Year.
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GST LUT Form FAQ’s

What should be filed in the letter of undertaking?

GSTIN and Name (Legal Name) of the Taxpayer will be prefilled based on login. The Taxpayer needs to select the financial year for which LUT is being filed, enter the name, address, and occupation details of two independent and reliable witnesses.

Is it mandatory to record them manually approved LUT in online records?

It is not mandatory, but if the Taxpayer wants to record the manually approved LUT to be available in online records, he can furnish it with the online application.

Who has to sign the LUT application?

Primary authorized signatory/Any other Authorized Signatory needs to sign and file the verification with DSC/EVC. The authorized signatory can be the working partner, the managing director, or the proprietor or by a person duly authorized by such operating partner or Board of Directors of such company or proprietor to execute the form.

How would I know that the process of furnishing the LUT has been completed?

After successful filing, the system will generate ARN and acknowledgment. You will be informed about successful filing via SMS and Email, and you can also download the acknowledgment as a PDF.

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.

What documents are required for GST LUT filing?

LUT cover letter- duly signed by an authorized person Copy of the GST registration PAN of the entity.

 

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