The Letter of Undertaking (LUT) is a document that exporters submit to the GST department, stating that they will fulfill all the GST requirements while exporting without making an IGST payment. This document is submitted in the form GST RFD 11 under rule 96 A. This guide provides information on who needs to file LUT, eligibility, documentation, and the process of filing LUT in GST.
Incorporation
GST-registered goods and service exporters need to submit LUT in Form GST RFD-11.
Exporters who have been prosecuted for any offense and tax evasions exceeding Rs 250 lakhs under CGST Act or the Integrated Goods and Service Act, 2017, or any existing laws are not eligible to file the GST LUT. In such cases, they would have to furnish an Export bond.
Process
The exporter needs to prepare the necessary documents for Bonds, including Form RFD-11, Bond on stamp paper, Bank guarantee, Authority letter, and other supporting documents.
A separate bond is not needed to be furnished for each consignment. Instead, a running bond can be furnished.
The exporter needs to submit the documents to the department and get them verified by a relevant officer to avoid any rejection.
After filing the document, a signed letter shall be issued by the officer acknowledging the same.
Documentation and Other Considerations
The LUT can be submitted by any individual who is registered under GST, provided they have not been executed in case of tax evasion exceeding Rs.250 lakh or any other offense.
The validity of such LUTs is for one year, and an exporter is required to furnish a fresh LUT for each financial year.
If the conditions mentioned in the LUTs are not satisfied within the specified time limit, then the privileges will be revoked, and the exporter will have to furnish bonds.
Entities that are not eligible to submit a LUT based on the conditions mentioned will have to furnish an export bond and a bank guarantee.
The Form RFD-11 is filed with the registered name, address, GST no., date of furnishing, signature, date, and place, and details of witnesses (name, address, and occupation).
Exporters can furnish a running bond so that an export bond needs not to have to be executed for each export transaction. However, if the outstanding tax liability on exports exceeds the bond amount at any time, then the exporter must furnish a new bond to cover the additional liability