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Letter of Undertaking (LUT) under GST

Unlock export potential with LUT compliance under GST. Export goods/services seamlessly, gain competitive edge and maximize savings. Simplify compliance, streamline operations, and stay ahead in the global market.

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Letter of Undertaking under GST
Required Document
LUT cover letter
GST Registration Copy
PAN Card (Entity)
KYC Documents (Authorized Person/Signatory)
GST RFD11 Form
Canceled Cheque
Authorization Lette
IEC Code Copy

Innovative Taxation is your trusted partner for business tax solutions. We know the difficulties faced by individuals and businesses, especially those involved in exports, when it comes to taxation and compliance. We have a knowledgeable team ready to help you navigate the complex Goods and Services Tax (GST) system. Compliance of Letter of Undertaking (LUT) under GST is an important factor that exporters should keep in mind.

What is Letter of Undertaking (LUT) under GST?

LUT stands for Letter of Undertaking. It is a necessary document for exporters under the Goods and Services Tax (GST) regime. By depositing LUT, exporters can export without paying integrated tax. It streamlines the export process, reduces financial burden and helps businesses compete in the international market.

Who needs to file LUT in Form GST RFD-11? Understanding LUT Requirements for GST Registered Exporters

The following entities are required to file LUT in Form GST RFD-11:

  1. GST Registered Goods and Services Exporters: All exporters who are registered under GST and engaged in the supply of goods or services, whether in India, overseas or Special Economic Zones (SEZs), are required to file LUT.
  2. Exemption: However, exporters who have been prosecuted for offenses involving tax evasion exceeding Rs 250 lakh under the CGST Act, IGST Act, or any extant law are not eligible to file GST LUT. In such cases, they are required to furnish an export bond.

The objective of the government behind the LUT provision is to promote exports by providing relief. If you need assistance with GST LUT filing or Export Bond filing, our GST experts at IndiaFilings can help you navigate the process.

As per CGST rules, any registered person can submit an export bond or LUT without paying integrated tax in GST RFD-11 if they fulfill the following criteria:

  • They intend to supply goods or services to India, foreign countries or SEZs.
  • They are registered under GST.
  • They want to supply goods without paying integrated tax.
    Consultation with GST experts can provide valuable guidance and assistance in effectively meeting your LUT filing requirements.

Eligibility to file LUT in GST: Who can use the promissory note?

Letter of Undertaking (LUT) is available for use by registered taxpayers engaged in export of goods and services. However, persons who have been prosecuted for tax evasion of more than Rs. 250 lakh are ineligible. LUTs are valid for one year and must be renewed every year. Failure to meet the LUT conditions within the specified time frame will result in revocation of privileges, which will require the submission of a bond. LUTs and bonds are applicable for zero-rated supplies to SEZs without payment of IGST, export of goods outside India without payment of IGST, and provision of services to customers outside India without payment of IGST.

How Innovative Taxation Can Help with Letter of Undertaking (LUT) under GST:

We specialize in providing end-to-end support for GST Letter of Undertaking (LUT) compliance. Our knowledgeable staff can guide you through each step of the process as they are well-versed in the intricacies of LUT requirements.

LUT Application Support: We assist you in preparing and filing the LUT application accurately and quickly, ensuring compliance with all necessary documents and formalities.

Compliance Advice: Our experienced professionals stay up-to-date with the latest GST regulations, keeping you informed of any changes or updates related to LUT compliance. We provide proactive guidance to ensure your continued compliance.

Documentation Support: We help you gather and organize the documentation needed for LUT compliance, ensuring that all relevant information is complete and in order.

Risk Management: Our team conducts an in-depth review of your business operations to identify any potential risks or areas of non-compliance. We provide guidance on how to mitigate these risks and ensure a smooth LUT compliance process.

Ongoing Support: Even after receiving LUT approval, our dedicated team is available to answer any questions or provide assistance related to LUT compliance. We are committed to supporting your business throughout its export journey.

Documents Required For Letter of Undertaking (LUT) under GST

LUT Cover Letter – Acceptance Request: A letter, duly signed by an authorized individual, requesting the acceptance of the LUT.

GST Registration Copy: A copy of the entity’s GST registration certificate.

PAN Card (Entity): A copy of the PAN card for the entity registered under GST.

KYC Documents (Authorized Person/Signatory): KYC documents of the authorized person or signatory, including identification and address proofs.

GST RFD11 Form: The prescribed GST RFD11 form used to furnish LUT details.

IEC Code Copy: A copy of the Importer Exporter Code (IEC) issued by the Directorate General of Foreign Trade (DGFT).

Canceled Cheque: A canceled cheque or bank account details for verification purposes.

Authorization Letter: A letter of authorization or board resolution granting the authority to the person signing the LUT on behalf of the entity.

It is important to note that the exact list of required documents may vary depending on the type of business entity and the nature of the business. It is advisable to consult a professional tax consultant or a GST expert to ensure that all the necessary documents are in order before applying for GST registration.

FAQs

Ans: Letter of Undertaking (LUT) is a document that exporters registered under GST can furnish to export goods or services without paying Integrated Tax.

Ans: Any registered taxpayer who is involved in export of goods and services can apply for LUT. However, individuals were prosecuted for tax evasion of more than Rs. 250 lakh are ineligible.

Ans: A LUT is valid for one financial year. Exporters need to submit a fresh LUT for every financial year.

If the conditions mentioned in the LUT are not fulfilled within the specified time limit, the privileges granted under the LUT will stand cancelled. In such cases the exporters will have to furnish the bond. 

Other assessees should furnish the bond while exporting without payment of Integrated Goods and Services Tax (IGST).

LUTs/Bonds can be used for zero-rated supplies to Special Economic Zones (SEZs) without payment of IGST, export of goods to countries outside India without payment of IGST, and export of goods to India without payment of IGST Provision of services to customers located outside can be done for

Yes, a LUT can be modified or canceled before its expiry by submitting a modified LUT or cancellation request respectively.

No, it is not mandatory for all exporters to obtain LUT. Exporters can also choose to furnish Bond instead of LUT.