GST LUT Filing
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Difference Between LUT and Bond
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Legal Provisions Governing LUT
GST LUT (Letter of Undertaking) Filing
Under GST (Goods and Services Tax) in India, businesses that export goods or services can file a Letter of Undertaking (LUT) to avoid paying taxes on exports. LUT allows exporters to make exports without payment of Integrated GST (IGST). Here’s a detailed guide on GST LUT filing
What is LUT?
A Letter of Undertaking (LUT) is a document that exporters file with the government, promising to adhere to the rules and regulations of GST during exports without paying IGST. It’s essentially a self-declaration that the exporter will fulfill all the conditions laid down by GST law.
Who can apply for LUT?
Any registered taxpayer who is involved in exporting goods, services, or both can apply for LUT. LUT is particularly beneficial for exporters as it exempts them from paying IGST on exports. This includes:
- Exporters of goods and services.
- Suppliers to SEZ units or developers.
Validity of LUT
Once filed, an LUT is valid for the whole financial year in which it is filed. For the next financial year, you will need to file a fresh LUT.
Conditions to File LUT
- The exporter must adhere to the export requirements, ensuring that the exported goods/services will be realized within the prescribed time frame.
- If these conditions are violated, IGST would become payable, with applicable interest.
Benefits of Filing LUT
- Avoid paying IGST on exports.
- Improves cash flow, as exporters do not need to pay tax and later claim refunds.
How to File LUT?
Step-by-Step Process for Filing LUT Online on GST Portal:
Login to GST Portal:
- Visit the GST Portal: www.gst.gov.in.
- Log in using your credentials.
Navigate to the LUT Form:
- After logging in, go to ‘Services’ → ‘User Services’ → ‘Furnish Letter of Undertaking (LUT)’.
Fill in the LUT Form:
- Select the financial year for which the LUT is being filed.
- The system will auto-fill details of the GSTIN and name of the entity.
Details of Witnesses:
- Provide the names and addresses of two independent witnesses. These can be any individuals (such as employees or business partners) who are aware of your business activities.
Upload Documents:
- If applicable, upload any supporting documents, like the authorized signatory’s signature.
Declaration and Submission:
- Read and accept the terms and conditions.
- Finally, the authorized signatory (director, proprietor, etc.) needs to sign the form using a Digital Signature Certificate (DSC) or e-Signature.
Acknowledgment:
- Once successfully submitted, you will receive an acknowledgment with the Application Reference Number (ARN). You can download a copy of the LUT from the GST portal.
Documents Required for LUT Filing
- GST registration certificate.
- Exporter’s PAN card.
- Authorized signatory’s ID proof (e.g., Aadhar, PAN).
- Export documents (if needed).
Tracking LUT Status
Once the LUT is filed, you can track its status on the GST portal by navigating to Services → User Services → View My Submitted LUTs
When is LUT Rejected?
LUT can be rejected if:
- The form is incomplete or incorrect.
- The entity or individual has a history of defaulting on taxes.
Difference Between LUT and Bond
- LUT: Suitable for exporters who haven’t been prosecuted for tax offenses involving amounts exceeding ₹250 lakh. No bank guarantee is required.
- Bond: Required when LUT is not allowed, necessitating a bank guarantee. The exporter must submit this to the jurisdictional officer.
Legal Provisions Governing LUT
The legal framework surrounding LUT under GST is covered under:
- Section 16 of the IGST Act: This section allows for zero-rated supplies, which include:
- Exports of goods or services.
- Supplies to SEZ units or developers.
- Rule 96A of the CGST Rules, 2017: It specifies that exporters can export goods/services without payment of IGST by furnishing an LUT or a bond.
LUT for Exports: Detailed Online Filing Process
Here’s an in-depth breakdown of how to file LUT on the GST portal:
Step-by-Step Online Filing Process:
Step 1: Login to the GST Portal
- Go to the GST Portal.
- Log in with your valid GSTIN credentials (Username and Password).
Step 2: Navigate to LUT Application
- Once logged in, click on the Services tab in the top navigation bar.
- From the dropdown, select User Services, and under that, select Furnish Letter of Undertaking (LUT).
Step 3: Selecting the Financial Year
- A new window will open. Select the financial year for which you are filing the LUT from the dropdown (e.g., FY 2023-2024).
Step 4: Declaration and Form Filling
- A pre-filled form will appear with the GSTIN and other details.
- You will need to select the tick boxes to agree to the conditions for exporting without payment of IGST. These include:
- Complying with all rules laid down under GST.
- Ensuring the goods/services will be exported within the specified time.
Step 5: Witness Details
- Provide the details of two witnesses (Name, Address). These can be employees, associates, or anyone who can vouch for your business operations.
Step 6: Authorized Signatory Details
- In the “Authorized Signatory” field, select the name of the person who is filing the LUT. This person should already be registered on the GST portal as an authorized signatory.
Step 7: Upload Supporting Documents (Optional)
- While not mandatory in all cases, some jurisdictions may require the authorized signatory’s signature to be uploaded. The signature can be in the form of a scanned image or digital signature.
Step 8: Sign and Submit
- After filling in all details, you need to sign the form using:
- DSC (Digital Signature Certificate), or
- EVC (Electronic Verification Code).
Step 9: Download Acknowledgment
- Once submitted, the system generates an acknowledgment with an Application Reference Number (ARN). This number can be used to track the status of the LUT.
Step 10: Print the Filed LUT
- You can print and download the LUT from the portal under User Services → View My Submitted LUTs.
Documents Required for LUT Filing
Though the GST portal allows for a simple online filing process, some jurisdictions might require the following documents:
GST Registration Certificate: To prove the business is registered under GST.
PAN of the Business: For cross-verification with the details submitted.
Details of the Authorized Signatory: Including Aadhar or PAN for identity verification.
Copy of previous LUT (if applicable): If the business has filed an LUT in the previous year.
Export-related documents: In some cases, past export records might be requested to verify the eligibility.
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