GST LUT Filing

Who can utilise Letters of Undertaking (LUT) and Bonds?

LUTs can be used by any registered taxpayer exporting goods or services. Any person who has been prosecuted under the act for tax evasion for an amount of Rs. 2.5 crores or more are not eligible to provide LUTs.

The validity of such LUTs is limited to one year (till the end of the financial year). Every financial year, an exporter who provides LUTs must provide new LUTs. If the LUT conditions are not met within the timeframe, the privileges are removed, and the exporter is required to post bonds.

If the export is made without payment of IGST, bonds should be provided to all other assesses (together with those who have been prosecuted for tax evasion of Rs. 2.5 crores or more under the GST legislation). Letters of the undertaking can be provided and submitted online via the GST portal.

At the same time, the bonds must be filled out manually because a hard copy must be sent to the department. LUT/Bonds can be used in the following transactions:

• Zero-rated supplies to SEZ without IGST payment
• Payment of IGST on products exported to a country outside India
• Providing services to a client outside of India without paying the IGST

When should you apply for/file a LUT, and what was the situation before GST?

Before exporting goods or services, a letter of undertaking must be filed/submitted online. Previously, exporters had to manually submit the filled and signed RFD-11 on Business letterhead in duplicate –

• One to the Jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business, where the export documents were verified using the ICEGATE system
• The other to the Customs clearing authority.

This, like the previous excise scheme, resulted in exporters losing a significant amount of time and money on compliance. Finally, this procedure has been rationalised and simplified, providing transparency to all stakeholders engaged in an exporter's whole export process. Note that the bond must be presented on non-judicial stamp paper and submitted manually.

How to fill out a LUT on the GST portal

To provide LUT on the GST Portal/GSTN, complete these steps:

• Step 1: Log in to the GST Portal.
• Step 2: Select 'Furnish Letter of Undertaking(LUT)' from the 'SERVICES' tab > 'User Services'.

• Step 3: From the 'LUT Applied for Financial Year' drop-down list, choose the financial year for which the Letter of Undertaking is applied. E.g., 2021-22.

  Note: If the Letter of Undertaking is already submitted by you manually for any of the prior periods, please upload it using the 'Choose File' option on the same window.

  Ascertain the following:

  Only PDF and JPEG files are accepted.

  The upload file size limit is 2 MB.

• Step 4: On the Letter of Undertaking Form/ GST RFD-11 that displays on the screen, please fill in the information required. On the form, the following must be completed:

  Self-Declaration (a): Mark each of the three boxes by clicking on them.

  Exporter commits to the following by doing so:

  Export of goods/services must be completed by three months of the date of issue of the Export invoice or within any prescribed time authorised by the Commissioner.

  • Following the GST rules when it comes to exports.
  • If you fail to export, IGST plus interest must be paid*.

  (b) Provide Information to Independent Witnesses: Mention the names, occupations, and addresses of two independent witnesses in the red boxes.

  It is noteworthy that the Witnesses listed in the Letter of Undertaking (LUT) are also listed on the running Bond/Bank guarantee.

• Step 5: Select a file location > Click 'SAVE' > 'PREVIEW' to double-check the form's accuracy before submitting it. It should be noted that a signed/submitted form cannot be revised at this time.

• Step 6: Sign and submit the form using one of the following methods:

  The Letter of Undertaking can be signed by the primary authorised signature or any additional authorised signatory. The Managing Director, the working partner, the Firm Secretary, the proprietor, or a person duly authorised by such active partner or the Board of Directors of such company or proprietor to execute the form, can all be authorised signatories.

  DSC Submission: Sign the application with the authorised signatory's registered Digital Signature Certificate.

  To access this feature, go to 'SIGN AND FILE WITH DSC' > 'SIGN AND FILE WITH DSC'. A message box with a warning appears. 'PROCEED'> is selected. The system generates a unique ARN (Application reference number).

  OR

  Submit With EVC: To use this option, go to 'SIGN AND FILE WITH EVC' > The system will send an OTP to the authorised signatory's registered mobile phone number and e-mail address. Enter the OTP in the pop-up > A submission warning notice box appears > 'PROCEED'> is selected to sign the application. The system creates a unique ARN (Application reference number)** for each company or limited liability partnership. A message of confirmation arrives. By e-mail and SMS, the GST Portal transmits this ARN to the Taxpayer's registered e-mail and mobile number.

  The acknowledgement can be downloaded by clicking the DOWNLOAD button. You can also look at the Letters of Undertaking previously posted on the GST website.

  On the landing page, 'SERVICES' > 'User Services' > 'View my Submitted LUTs' Choose a timeframe > View the list of LUTs available within the given period> To see the details of a Letter of Undertaking, click 'VIEW' next to it.

  LUT and Bonds Format in RFD-11

  The following is the format of the RFD-11:

  LUT application form:

  • Registered Name
  • GSTIN Number
  • Address
  • Date of filing
  • Date, place, and signature
  • Witness information (Name, address and occupation)