LUT in GST: Understanding Letters of Undertaking for Tax Savings
Last Updated : Sept. 15, 2023, 4:45 p.m.
LUT in GST is the acronym for Letters of Undertaking. It is where a manufacturer manufacturing paper can utilise to pay less tax on the merchandise and products they sell. Any shipments eligible for Integrated Goods and Services Tax underneath the current GST can be recovered through a refund against the paid tax. Given the issues many exporters face in tax refunding, alternate possibilities can appear appealing. A Letter of Undertaking in the Goods and Services Tax saves exporters’ time and effort in requesting a refund and the possibility of cash being blocked because of tax payments. You can file Letters of Undertaking and receive the LUT certificate online, making it quick and simple.
Meaning of Letters of Undertaking (LUT) in GST
LUT in GST is a document that a user furnishes declaring the fulfilment of all requisites under the Goods and Services Tax. The Letter of Undertaking is provided in the scenario of exports undertaken without paying the Integrated Goods and Services Tax. As per Notification No. 37 /2017 – Central Tax, it is compulsory to provide Letters of Undertaking to export goods and services without paying the IGST.
Suppose the exporter fails to provide the LUT certificate. In that case, the exporter has to pay the Integrated Goods and Services Tax or furnish an export bond. Earlier, the Letter of Undertaking could only be filled offline to the concerned Goods and Services Tax office. The Government of India has simplified and eased the procedure of filing the LUT in GST online. Letters of Undertaking (LUT) in Goods and Services Tax are prescribed to be provided in the form Goods and Services Tax RFD 11 under rule 96A, where exporters declare that they will be able to fulfil the requisites that are prescribed under the Goods and Services Tax while exporting without paying the Integrated Goods and Services Tax.
Documents Required for Letters of Undertaking (LUT) in GST
The documents needed for downloading the LUT certificate and filing Letters of Undertaking (LUT) in GST are as follows:-
- LUT in GST cover letter-acceptance request with a signature from an authorised individual.
- Goods and Services Tax registration copy
- Permanent Account Number Card
- Know Your Customer Documents of the signatory or authorised individual
- Goods and Services Tax RFD11 form
- Import Export Code Copy
- Cancelled cheque
- Authorised letter
How to Apply for Letters of Undertaking (LUT) in GST and Download the Certificate?
Exporters complying with the Goods and Services Tax should fill LUT in GST online. It is a revolution in automating the Goods and Services Tax technique and reducing exporters’ developing grievances. Follow the below steps to file your Letters of Undertaking (LUT) in GST and download the LUT certificate:-
- Visit the official Goods and Services Tax website.
- Sign into your account with your user identification number and password
- Navigate to the menu bar and tap the services option.
- Click the User Services option.
- Select the Furnish LUT options from the drop-down menu options.
- Under the Letter of Undertaking for the fiscal year, choose the financial year for which you want to file your Letter of Undertaking.
- Furthermore, you can switch the Letters of Undertaking that belong to situations by clicking the select document option and importing the Letter of Undertaking document.
- After following the steps above, you can tick the boxes to agree to the terms and conditions.
- After ticking the boxes, fill in the relevant fields to furnish the significant points of the two witnesses.
- You should declare the witnesses on the LUT in GST.
- You can signal the Letter of Undertaking at your EVC or DSC side.
- After filing the Letter of Undertaking, the LUT in GST type can not be re-edited. Ensure to cross-check all the relevant filled-in details.
- After completing the above steps, you will be notified via your email address, SMS and mobile number.
- You can download your LUT certificate, acknowledgement and the LUT in GST.
Conclusion
LUT in GST is a declaration that a manufacturer submits to be exempted from paying IGST on exports. To hike exports, the Government of India has allowed exporters to file a Letter of Undertaking that lets them export while paying IGST. The government has created the choice to submit a LUT Bond, which lets small merchants undertake exports with zero IGST, provided they specify their goal to expand internationally. When you sign into their official portal, your GSTIN and other details are automatically filled in. Taxpayers should select the calendar year the LUT is submitted and furnish names, names, occupations, etc. After completing LUT in GST, an assessee should select the personality requirement, after which you will receive an LUT certificate.
Frequently Asked Questions (FAQs)
1. What must be filed in LUT or Letters of Undertaking in GST?
GSTIN and taxpayer’s name will be prefilled depending on login. As a taxpayer, you must choose the fiscal year for which Letters of Undertaking are filed. Input the name, address and information related to the occupation of trustworthy and independent witnesses.
2. Who should sign the Letters of Undertaking application?
Primary authorised or any other authorised signatory should sign and file the validation with DSC/EVC. It could be a working partner, the managing director, a duly authorised individual, or a proprietor by a firm’s Board of Directors operating partner or proprietor to sign the form.
3. What are Letters of Undertaking in GST?
A business owner can transfer products and services and avoid paying taxes if they file a Letter of Undertaking in GST. If filing the Letter of Undertaking isn’t completed, the producer must pay the substantial income during exporting before claiming a reimbursement to qualify for shipping.
4. Is recording the manually approved Letters of Undertaking in online records compulsory?
Yes, manually recording the approved Letters of Undertaking in online records is not mandatory. However, suppose you, as a taxpayer, wish to record the manually approved Letters of Undertaking to be available in online records. In that case, you can furnish it with an online application.
5. How can you know the procedure for providing Letters of Undertaking in online records is completed?
After successfully filing the Letters of Undertaking, the system will generate the Acquirer Reference Number and acknowledgement. You’ll be notified of your successful filing through SMS and email. You can download the acknowledgement as a portable document format.