LETTER OF UNDERTAKING (LUT)

Letter of Undertaking (LUT)

LUT stands for Letter of Undertaking. The LUT is required to be submitted to GST department when an exporter exports goods or services or both with out payment of IGST. You can file LUT in form RFD 11 on GST portal. An LUT has to be filed before exporting goods or services. An LUT submitted is valid for that financial year only. In case whereo LUT is not submitted, the exporter has to pay IGST and he can claim it on export bond.

Export of Goods or Services under bond or letter of undertaking-Rule 96A of CGST Rules 2017:

Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest @ 18% as specified under sub-section (1) of section 50 within a period of:

  • (a) fifteen days after the expiry of three months [or such further period as may be allowed by the Commissioner] from the date of issue of the invoice for export, if the goods are not exported out of India; or

  • (b) fifteen days after the expiry of one year [or such further period as may be allowed by the Commissioner] from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange [or in Indian rupees, wherever permitted by the Reserve Bank of India].

A bond or letter of undertaking (LUT) can also be given in respect of zero-rated supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit without payment of integrated tax.

Format of Letter of Undertaking:

When to submit a Bond or Letter of Undertaking (LUT):

Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11. The LUT has to be submitted for each financial year. One LUT filing is sufficient complance of Rule 96A of CGST Rules 2017 for one financial year.

LUT Filing Pocess in GST:

Herein below is the step by step process to file LUT:

  • 1

    Login to GST Portal

    Through GST Portal - 1 Minute Job

    You can Login to your account in GST Portal, on services section, go to user services and click furnish letter of undertaking (LUT).

  • 2

    Financial Year & LUT attachment

    Through GST web portal - 5 Minutes Job

    Once you click furnish letter of undertaking, the system will you show you the financial year options to select. You can select the appropriate financil year to which you submit Letter of Undertaking and attach the Letter of Undertaking in the attachment section.

  • 3

    Fill the detaisl of Name, address and occupation of the independent Witnesses

    Through GST web portal - 5 Minutes Job

    After selecting financial year and attacing LUT, fill the details of Name, address and occupation of the independent Witnesses.

  • 4

    Submit the LUT Application

    Through GST web portal - 2 Minutes Job

    After filling the details, select the authorised signatory and sign with DSC if required and submit with the department. Then the system will generate the ARN and the GST officer will verify the application and approves it.

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