A Letter of Undertaking (LUT) in GST is a crucial document that allows Indian exporters to ship goods or provide services without paying Integrated Goods and Services Tax (IGST) upfront It serves as a formal declaration by exporters that they will comply with all GST regulations while conducting international trade or supplying goods to Special Economic Zones (SEZs).
The LUT must be filed using the official GST RFD-11 form on the GST portal, and it is typically valid for one financial year. To be eligible, exporters must have a valid GST registration and meet certain compliance criteria, such as not having been prosecuted for tax evasion involving amounts over Rs. 250 lakh. The document helps businesses maintain better cash flow by eliminating the need for immediate tax payments and subsequent refund processes.
Exporters must submit the LUT with specific details, including their name, address, GSTIN, a declaration of compliance with GST laws, and the signature of an authorized representative. If an exporter does not qualify for an LUT, they must alternatively furnish an export bond to continue their international trade operations This system ensures that exporters can conduct their business smoothly while maintaining tax compliance under the GST framework.
The Eligibility criteria to obtain a LUT certificate include the following:
The Letter of Undertaking (LUT) is open for utilization by any registered taxpayer engaged in exporting goods and services. However, individuals facing prosecution for tax evasion exceeding Rs. 250 lakh or more are ineligible to benefit from this option.
Access the official GST portal at www.gst.gov.in. Use your GSTIN and login credentials to sign in. If you do not have an account, ensure you register for a GST number before proceeding.
Once logged in, go to the "Services" tab, then select "User Services," and choose "Furnish Letter of Undertaking (LUT)." This will direct you to the application form for submitting your LUT.
Complete the LUT application form by providing necessary details such as Financial year for which LUT is applied, Details of the authorized signatory, Any previous LUT details if applicable.
After filling out the form, review all the information for accuracy. You can submit the form using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). Click on "Submit" to finalize your application.
Upon successful submission, you will receive an acknowledgment via email and SMS containing your LUT number. You can download your Letter of Undertaking from the GST portal for your records.
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