STARTUP STATION

GST LUT Filing

LUT, an acronym for Letter of Undertaking holds significant relevance within the context of the Goods and Services Tax (GST) framework. This document serves as a powerful tool for exporters, allowing them to engage in the export of goods or services without the obligation of immediate tax payment.

GST LUT Form for Exporters

For all registered taxpayers engaged in the export of goods or services, it is mandatory to provide a Letter of Undertaking (LUT) using the Form GST RFD-11 form on the GST portal. This obligation is essential to facilitate exports without paying Integrated Goods and Services Tax (IGST).

Eligibility criteria

The Eligibility criteria for applying for a LUT 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.

  • Intent to Supply: The applicant should intend to supply goods or services within India, to foreign countries, or to Special Economic Zones (SEZs).
  • GST Registration: The entity seeking to avail the benefits of an LUT should be registered under the GST framework.
  • Tax-Free Supply: The desire to supply goods without the imposition of integrated tax is an essential requirement for LUT application.
Documents Required for LUT under GST

To apply for a Letter of Undertaking (LUT) under GST, you’ll need the following documents:

  • LUT Cover Letter: A request letter signed by an authorized person.
  • Eligibility: Ensure you meet eligibility criteria (no serious tax evasion cases).
  • Copy of GST Registration: Proof of your GST registration.
  • PAN Card of Entity: Identification using PAN card.
  • KYC of Authorized Person: ID and address proof of authorized person.
  • GST RFD 11 Form: Application form for LUT.
  • Copy of IEC Code: If involved in exports.
  • Canceled Cheque: From your associated bank account.
  • Authorized Letter: Granting power to the authorized signatory.
Advantages of Filing LUT for Exporters

Choosing to file a Letter of Undertaking (LUT) brings a host of benefits to exporters, streamlining their export activities and optimizing their financial operations:

  • Tax-Free Export: Opting for the LUT enables exporters to carry out their export transactions without the burden of immediate tax payment. This contrasts the alternative, where taxes are paid and later claimed as refunds for zero-rated exports.
  • Simplified Process: By utilizing the LUT, exporters avoid the complexities of claiming tax refunds or engaging in follow-ups with the tax authorities. This translates to substantial time savings and operational ease.
  • Unblocked Working Capital: Funds that would have otherwise been locked as tax payments remain accessible for exporters. This is especially vital for small and medium-sized enterprises (SMEs) grappling with financing and working capital constraints.
  • Liberated Resources: Regular exporters find a consistent advantage with the LUT. Once filed, the LUT remains valid for the entire financial year. This longevity minimizes the need for repetitive filings, allowing exporters to focus on their core activities.

By leveraging the benefits of the LUT, exporters can navigate the realm of international trade with greater efficiency and flexibility.