GST Letter Of Undertaking New

The Letter of Undertaking (LUT) is a document that allows exporters to undertake exports without paying integrated Goods and Services Tax (GST) on their supplies. The LUT exempts the exporter from paying GST on exports, and hence is an essential document for businesses engaged in export activities. Recently, the government of India has introduced new guidelines for the issuance of LUTs. As per the new guidelines, businesses need to submit their LUTs online through the GST portal. The process of submission is entirely digital, and businesses can do it from anywhere at any time. shloktaxwala ensures that exporters can efficiently manage their LUT submissions in compliance with the latest regulations. By leveraging shloktaxwala‘s expertise, businesses can seamlessly navigate the digital submission process.

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LUT Filing

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Overview of GST Letter of Undertaking New

A Letter of Undertaking (LUT) is a document that businesses can submit to the Indian Goods and Services Tax (GST) department to claim an exemption from paying GST on exported goods or services.

Under the GST regime, exporters are eligible for a refund of the tax paid on inputs used to manufacture goods or provide services that are exported. However, to claim this refund, exporters are required to furnish a bond or LUT to the GST authorities. The LUT serves as a legal undertaking by the exporter to fulfill all the export-related obligations and to refund any tax benefits that are wrongly claimed.

The LUT is valid for a period of one year and must be submitted before the commencement of the export of goods or services. It must be submitted in the prescribed format along with the necessary supporting documents. Once accepted by the GST authorities, the LUT allows exporters to make exports without payment of tax and without the need to furnish a bond for each export shipment.

It is important to note that not all exporters are eligible to submit an LUT. The eligibility criteria may vary from time to time and businesses are advised to check the latest guidelines issued by the GST authorities before applying for an LUT.

Advantages of GST Letter of Undertaking New

Benefits of LUT for Exporters

Exemption from Payment of GST With an LUT in place, exporters can supply goods or services without paying any GST. This helps reduce the cost of exports and makes Indian goods and services more competitive in the global market.
Quick Clearance of Goods Exporters with an LUT can get their goods cleared from customs faster since they do not need to provide a bond for each shipment. This saves time and reduces the administrative burden for businesses.
Improved Cash Flow Since exporters do not need to pay GST on exported goods, they can use the cash for other business purposes, thereby improving their cash flow.
Reduced Compliance Burden With an LUT, exporters do not need to submit a bond for each export shipment, reducing the paperwork and compliance burden for businesses.
Enhanced Competitiveness With reduced compliance burden, quick clearance of goods, and improved cash flow, exporters can focus on enhancing their competitiveness and exploring new markets.

Registration Process

Step 1: Fill out a Simple Checklist
To apply for a Letter of Undertaking (LUT) under GST, our Compliance Manager will contact you to obtain the necessary documents and a simple checklist. Once you have filled out the checklist and submitted it along with your documents, we will begin preparing the LUT form.

Step 2: Submit your LUT
After verifying all the details and documents provided by you, we will prepare the LUT form for a particular financial year and file and submit it with your Digital Signature Certificate (DSC). We will notify you via Email or SMS once the submission is complete.

Step 3: Get your Acknowledgement
Once we have submitted your LUT, you will receive an Email or SMS with an acknowledgement. To download your acknowledgement, simply click on the DOWNLOAD option. We will also generate an acknowledgement for the same.

Required Documents

#1. PAN Card of an entity

#2. IEC Code Certificate

#3. LUT Cover Letter – acceptance request and signed by an authorized person

#4. GST RED11 Form

#5. GST Registration

#6. KYC of Authorised Person

#7. Cancelled Cheque

Frequently Asked Questions

What is the validity of Letter of undertaking?
Such LUTs have a one-year validity term (till the end of financial year). An exporter providing LUTs must provide new LUT for each fiscal year.
What are the conditions for LUT under GST?
Anyone who has faced legal action for tax evasion involving Rs. 250 lakh or more is ineligible. Such LUTs are only valid for a year, and an exporter must provide a new LUT for each fiscal year.
What if LUT is not taken?
If LUT is submitted after the deadline, the department is required under the circular to excuse the delay and authorise a reimbursement for exported goods and services.
Can we export without Lut?
If the client elects LUT, the supplier may provide goods or services under a bond or LUT without having to pay integrated tax and may request a reimbursement for any input tax credits that were not used. If a client is exporting products or services, they do not need to file for LUT.