What is a LUT?
The user certifies via a Letter of Undertaking (LUT) that they have complied with all GST requirements. When exporting products, services, or both without paying IGST, it is necessary. Notification No. 37/2017 - Central Tax states that in order to export goods exempt from the IGST, a LUT must be provided. An exporter is required to pay the IGST or submit an export bond if they fail to submit the LUT. LUTs could previously only be turned in in person at the assigned GST office. On the other hand, by making the LUT filing procedure available online, the government has streamlined it.
Benefits of LUT?
Exports Without Taxes: If you choose the LUT, you are able to carry out your export operations without having to pay taxes up front. This is not the same as the other option, wherein in the event of zero-rated exports, you pay taxes upfront and then wait for refunds.
Simplified Process: Using the LUT spares you from the hassles of following up with tax authorities or collecting tax refunds. You'll save time and have more seamless operations as a result.
Freeing Up Working Capital: You can now use the funds that you would have had to set aside for tax payments for your company. Small and medium-sized enterprises, who frequently struggle with funding and working capital, will particularly benefit from this.
Effective Resource Use: The long validity of the LUT is advantageous to regular exporters.
Document Required
- LUT Cover Letter: A request letter signed by an authorized person.
- Rent Agreement / NOC From Owner
- Eligibility Check: Make sure you meet the eligibility criteria (no serious tax evasion cases).
- GST Registration Proof: Evidence of your GST registration.
- Entity's PAN Card: Identification using the PAN card of the entity.
- KYC of Authorized Person: ID and address proof of the authorized person.
- GST RFD 11 Form: The application form for the LUT.
- Copy of IEC Code: If you're engaged in exports.
- Canceled Cheque: From your linked bank account.
- Authorization Letter: Granting authority to the authorized signatory.
- Mobile No & Email ID