LUT Application
All registered tax payers who export the goods or services will now have to furnish Letter of Undertaking (LUT) in GST RFD-11 form on the common portal of GSTN in order to make exports without payment of IGST.
When to apply/file?
Letter of undertaking has to be filed /submitted online before exporting the goods/services.
- Prior to this, exporters had to manually submit the filled and signed RFD-11 on Business letterhead in duplicate.
- One to the Jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business where the verification with the Export documents happens through ICEGATE medium
- Another along with the Export documents to the Customs clearing authority.
- Just like the earlier excise regime, this led to exporters losing considerable time and operating expense on this compliance.
- Eventually, this process has now been rationalised and made simple & quick, giving transparency in the entire process of exports by an exporter to all the stakeholders involved.
- Note that the Furnishing of Bond has to be on a non-judicial stamp paper and so needs a manual submission.
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Frequently Asked Questions
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General Questions
Letter of Undertaking is commonly known as LUT.
The Letter of Undertaking (LUT) is prescribed to be furnished in form GST RFD 11 under rule 96A, whereby the exporter declares that he/she would fulfil all the requirements prescribed under GST while exporting without making IGST payment.
To apply LUT, you need to:
- Login to GST website.
- Click on User Service.
- Click on Furnish Letter of Undertaking (LUT)
- Fill the form.
Submit with EVC or DSC
To facilitate exports under GST, it has been decided that the facility of furnishing LUT, in place of a bond, for exporting goods or services or both shall be allowed to exporters and no bank guarantee will be required
Any registered taxpayer exporting goods or services can make use of LUTs.
However, any person who has been prosecuted for tax evasion for an amount of Rs. 2.5 Crores or above under the act is not eligible to furnish LUTs.
The validity of such LUT’s is for a period of one year.
In case the LUT is not filed, the exporter may export by payment of IGST and then claim the refund of tax paid.
Filing LUT is convenient than refund mode as the exporters do not wish to indulge into hassles of refunds and block their funds.
- The export of goods or services is considered as a zero-rated supply. GST will not be levied on export of any kind of goods or services.A duty drawback was provided under the previous laws for the tax paid on inputs for the export of exempted goods.
Form GST RFD-11: The LUT can be filed in Form GST RFD-11 on the common portal by accessing Services > User Services > Furnish Letter of Undertaking (LUT).
The necessary details are filled and uploaded along with the digital signature as per the LUT filing procedure.