Letter of Undertaking is abbreviated as LUT. The Letter of Undertaking is a document submitted by the exporter in order to export goods or services without the payment of taxes. In case the LUT is not filed, the exporter may export by payment of IGST and then claim the refund of tax paid. Filing LUT is convenient than refund mode as the exporters do not wish to indulge into hassles of refunds and block their funds. The eligibility criteria to apply for LUT is comparatively relaxed than to the erstwhile system.
Letter of Undertaking is filed online using the form GST RFD 11. By filing LUT, the exporter undertakes that all the requirements prescribed for this route will be fulfilled by him.
LUT is the document that the exporters can file to export goods or services without having to pay taxes.
LUT spares exporters from the effort of pursuing a refund and eliminates the blocking of the fund.
Exports without tax payment
By filing LUT under GST, an exporter can export goods or services without paying the taxes.
If LUT is not filed, the exporter must first pay the required tax while making exports and then claim a refund to avail benefit of zero-rated exports.
Saves Working Capital
The regular exporters are at a huge benefit by filing LUT online as the refund process under another route is a time-consuming process. During which the bunch of capital is blocked in the form of a due refund. With this mode, the capital is free to be utilized for other necessary requirements. It also reduces the cost of exports.
An Entire Financial Year Validity
The Letter of Undertaking, once filed is valid for the whole financial year in which it is filed. Hence, unlike refund process, an exporter does not need to go through the procedural requirements every time an export consignment is carried out.
Simple and online process
The filing of LUT and its acceptance, both are made online since April, 2018. The applicant does not need to visit the officers for acceptance. The whole process can be completed online by submitting a few required documents.
Log on to GST portal for filing LUT certificate
Under "Service Tab" select "User Services" drop down has option of FURNISH LETTER OF UNDERTAKING.
After selecting this option, you need to select the financial year for which you want to file LUT.
Then upload pdf copy of last financial year LUT.
Fill the name, occupation and address of witnesses.
Further, fill the place of filing. Once this process is done preview the form.
The application can be signed with Digital Signature or via Electronic Verification Code.
You can download the LUT application from the GST portal.
A Tax Official, who is LUT Processing Officer, may disable LUT filing functionality for a taxpayer on the GST Portal. When Tax Official has disabled LUT filing for a taxpayer, taxpayer is intimated through SMS and email.
If LUT Processing Officer has disabled the furnishing of LUT for some taxpayer, then to get it enabled, taxpayer has to communicate this request to LUT Processing Officer manually. From GST Portal, taxpayer cannot raise the request to enable furnishing of LUT.
Taxpayer will be able to see his ARN under the Services > User Services > View My Submitted LUTs.
The taxpayer will be able to save the application at any time for a period of 15 days. Dashboard > Services > User Services > My Saved Applications allows you to access your saved applications.
If the LUT application is not processed by Tax Official, or any notice for clarification is not issued by the Tax Official within 3 working days, then the application will be deemed approved and the status of LUT application will change to "Deemed Approved"
Yes, the Letter of Undertaking is valid for the financial year in which it is filed. Hence, the LUT must be applied for in the beginning of every financial year.
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