Letter of Undertaking (LUT)
Letter of Undertaking (LUT) is a application sent by the exporter to sell products or services under the Goods and Services Tax system.
If you want to claim exemption from GST from your Exports of goods or services - It is Compulsary to file LUT with the department - We will get it for you.
The Central Board of Excise and Customs Vide Notification No. 37/2017 – Central Tax of 4 October 2017 expanded the LUT facility to all licensed exporters subject to some conditions and protections, taking due account of the difficulties faced by exporters in applying a LUT for exporting goods / services without paying tax in the earlier tax regime.
Note the following when furnishing a LUT:
1) Export eligibility under LUT:
All licensed suppliers planning to export products or services without charging integrated duty, except:
i. Person(s) prosecuted under the GST Act or any of the existing laws and
Ii . Ii. Tax evaded in these situations crosses Rs. 250 lakhs
2)LUT's validity:
A LUT is effective for the whole financial year it is tendered. Each financial year must be tendered fresh.
3) How to submit a LUT?
Forms RFD-11 on the GST site (www.gst.gov.in) before exporting goods / services. Any paperwork must be forwarded to the jurisdictional court.
4) Time frame for LUT adoption
A LUT shall be deemed approved as soon as an acknowledgement containing application reference number (ARN) is created on the same online furnishing.
5) Declarations in LUT
(A) Export of goods / services without payment of Integrated Goods and Service Tax (IGST) within the period prescribed by Rule 96A(1) of the CGST Rules
B) To conform with all requirements of the GST Act and Regulations on the export of goods / services
(C) In the case of non-export of goods / services, compensate IGST along with interest @ 18% p.a. on outstanding duty, from the billing date to the payment date.
6) Consequences of export non-compliance during the defined time under Rule 96A(1) of CGST Rules
An exporter can export goods/services without IGST payment under a LUT. Nevertheless:
-- If the products are not shipped from India within three months of the date of export invoice;
-- If the exporter has not received payment for the services rendered within one year from the date of export invoice
All such exporter shall pay IGST due along with interest @ 18% p.a within 15 days.
In addition, if the goods / services are not exported within the period prescribed in Rule 96A(1) of the CGST Rules and the registered individual fails to pay IGST with interest, the export facility without payment of tax under the LUT shall be deemed to have been revoked. After payment of IGST due with interest, the export facility under a LUT will be reinstated.
7) Special Economic Zone Application(SEZ):
All regulations related to the procurement of products and/or services without authorization by IGST under a LUT shall relate to the supply of goods and/or services to SEZ developers or SEZ units
Discussion of the following:
Exporting goods / services is an important part of the Indian economy's foreign currency inflow. Relaxing LUT 's inefficient and time-consuming manual application mechanism and expanding the facility to all registered taxpayers is a positive step that encourages expanded foreign currency inflows into the economy and the availability of additional working capital to individual exporters. A win-win scenario for both economy and human exporters.re to edit.
If you want to claim exemption from GST from your Exports of goods or services - It is Compulsary to file LUT with the department - We will get it for you.
The Central Board of Excise and Customs Vide Notification No. 37/2017 – Central Tax of 4 October 2017 expanded the LUT facility to all licensed exporters subject to some conditions and protections, taking due account of the difficulties faced by exporters in applying a LUT for exporting goods / services without paying tax in the earlier tax regime.
Note the following when furnishing a LUT:
1) Export eligibility under LUT:
All licensed suppliers planning to export products or services without charging integrated duty, except:
i. Person(s) prosecuted under the GST Act or any of the existing laws and
Ii . Ii. Tax evaded in these situations crosses Rs. 250 lakhs
2)LUT's validity:
A LUT is effective for the whole financial year it is tendered. Each financial year must be tendered fresh.
3) How to submit a LUT?
Forms RFD-11 on the GST site (www.gst.gov.in) before exporting goods / services. Any paperwork must be forwarded to the jurisdictional court.
4) Time frame for LUT adoption
A LUT shall be deemed approved as soon as an acknowledgement containing application reference number (ARN) is created on the same online furnishing.
5) Declarations in LUT
(A) Export of goods / services without payment of Integrated Goods and Service Tax (IGST) within the period prescribed by Rule 96A(1) of the CGST Rules
B) To conform with all requirements of the GST Act and Regulations on the export of goods / services
(C) In the case of non-export of goods / services, compensate IGST along with interest @ 18% p.a. on outstanding duty, from the billing date to the payment date.
6) Consequences of export non-compliance during the defined time under Rule 96A(1) of CGST Rules
An exporter can export goods/services without IGST payment under a LUT. Nevertheless:
-- If the products are not shipped from India within three months of the date of export invoice;
-- If the exporter has not received payment for the services rendered within one year from the date of export invoice
All such exporter shall pay IGST due along with interest @ 18% p.a within 15 days.
In addition, if the goods / services are not exported within the period prescribed in Rule 96A(1) of the CGST Rules and the registered individual fails to pay IGST with interest, the export facility without payment of tax under the LUT shall be deemed to have been revoked. After payment of IGST due with interest, the export facility under a LUT will be reinstated.
7) Special Economic Zone Application(SEZ):
All regulations related to the procurement of products and/or services without authorization by IGST under a LUT shall relate to the supply of goods and/or services to SEZ developers or SEZ units
Discussion of the following:
Exporting goods / services is an important part of the Indian economy's foreign currency inflow. Relaxing LUT 's inefficient and time-consuming manual application mechanism and expanding the facility to all registered taxpayers is a positive step that encourages expanded foreign currency inflows into the economy and the availability of additional working capital to individual exporters. A win-win scenario for both economy and human exporters.re to edit.
