Letter of Undertaking or LUT is an undertaking submitted by an exporter of goods or services. It allows the exporter to export goods or services without payment of IGST, given that he completes the process of export of goods or services within the prescribed time limit. In this article, you will understand:
A LUT is a guarantee that a bank provides to its customer (exporter in this case). Through LUT, the bank allows the exporter to raise short-term credit from a foreign branch of any other Indian bank. In case the exporter fails to pay the credit, the bank undertakes to pay on its customer’s behalf.
As per the IGST Act 2017, the export of goods and services (zero-rated supply) does not fall under the GST Act. Here, the options available for exporters are:
Hence, LUT is required so that the exporters can avail refunds.
All GSTIN holders (taxpayers registered under GST) meeting the following conditions can file LUT:
The LUT furnished for exports under GST is valid for one year. This means, for every financial year, LUT has to be filed by eligible exporters. It is also important to understand that in case the registered person filing LUT for export fails to meet the conditions of furnishing LUT, then he has to file a Bond instead of the LUT.
Further verification may take place after the application is submitted. Acceptance of LUT may take three working days after it is submitted along with the declarations.
Step 1: Access GST Portal
Step 2: Fill Form GST RFD-11
Step 3: Save Application
Step 4: Retrieving the Application
Step 5: View GST RFD-11
Step 6: Sign and File With DSC/EVC
*The system generates and sends an OTP to the registered mobile number and email address of the authorised signatory. Once the OTP is validated, the GST portal generates an Application Reference Number (ARN) and shows the applicant a confirmation message. Further, it sends the ARN on the registered email ID and the mobile number of the taxpayer.
Step 7: Download the Acknowledgement
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