A Complete Guide to Filing Letter of Undertaking (LUT) for Export of Goods or Services in GST
Are you an exporter or service provider looking to supply goods or services without paying Integrated Goods and Services Tax (IGST)? If yes, filing a Letter of Undertaking (LUT) is crucial for smooth operations. Here’s everything you need to know about filing Form GST RFD-11, the LUT, to benefit from zero-rated supply and ensure seamless exports and SEZ transactions.
Who Needs to Furnish a Letter of Undertaking (LUT)?
Any registered person wishing to export goods or services or supply to Special Economic Zones (SEZs) without payment of IGST must furnish a LUT. However, there’s a condition: the person must not have been prosecuted for tax evasion under the CGST Act, IGST Act, or existing laws for an amount of Rs 2.5 crore or above.
Examples of transactions for which LUT can be used include:
- Zero-rated supply to SEZ without IGST.
- Export of goods to a foreign country without IGST.
- Providing services to clients outside India without IGST.
How to File LUT?
Filing LUT is a simple process through the GST Portal. Here’s how you can file it:
- Login to the GST portal using your credentials.
- Navigate to Services > User Services > Furnish Letter of Undertaking (LUT).
- Select the financial year for which you are filing the LUT.
- Provide details of two reliable witnesses (name, address, and occupation).
- Complete the self-declaration sections before submission.
- Sign the form using your Digital Signature Certificate (DSC) or EVC.
Already Furnished a LUT? Here’s What You Need to Know
If you’ve already submitted a manual LUT for the current financial year, you can upload it and apply online for its approval. You can also choose to record manually approved LUTs in your online records, though this is not mandatory.
Important Tip: Only one LUT document (max 2MB) can be uploaded at a time. If you need to upload another, you’ll have to file a new application.
Features of the LUT Filing Process
- Save Application: If you’re not ready to file the application immediately, you can save it for up to 15 days and retrieve it later.
- Preview Option: Before submission, preview the application and save it as a PDF for your records.
- Processing: For Model 2 States, the LUT is processed online, while for Model 1 States, it may be processed manually or online.
- Track Status: You can easily track the status of your LUT under Dashboard > Services > User Services > View My Submitted LUTs.
LUT Application Statuses
Here are the possible statuses of your LUT application:
- Submitted: The application is successfully submitted.
- Pending for Clarification: A notice has been issued by the Tax Officer for clarification.
- Pending for Order: Your reply to the notice is awaited.
- Approved: The LUT is approved by the Tax Official.
- Rejected: The LUT has been rejected.
- Deemed Approved: If no action is taken by the Tax Officer within 3 working days, the LUT is considered approved.
- Expired: The LUT expires at the end of the financial year.
What Happens if the LUT Isn’t Processed in Time?
If the LUT isn’t processed or clarified by the Tax Officer within three working days, the system will automatically mark it as Deemed Approved. You’ll also receive an acknowledgment and can download the approval as a PDF.
Can a Tax Officer Disable LUT Filing?
Yes, a Tax Officer has the authority to disable LUT filing for a taxpayer. If this happens, the taxpayer will be notified via SMS and email. To get it enabled again, the taxpayer must directly communicate with the LUT Processing Officer.
Wrapping Up
Filing a Letter of Undertaking is a necessary step for businesses involved in exports or SEZ transactions who wish to claim zero-rated supplies. The process is straightforward, but understanding the requirements, status tracking, and possible challenges ensures your export journey is free of tax hurdles. Stay informed and make the most of this GST provision!
