File Letter of Undertaking (LUT) in GST

GST RFD-11 Form, Eligibility & Process to fill the Documents

What does LUT under GST means?

LUT in GST: Letter of Undertaking is its full name and definition. Under rule 96 A, it must be provided in the form GST RFD 11, in which the exporter certifies that they will comply with all applicable GST requirements when exporting without paying IGST.

Who needs to file LUT in Form GST RFD-11?

All GST-registered exporters of goods and services must file a GST LUT. Exporters who have been charged with a crime or committed tax evasions totaling more than Rs 250 lakhs under the CGST Act, the Integrated Goods and Services Act of 2017, or any other applicable legislation are ineligible to submit a GST LUT. They would need to provide an export bond in these circumstances.

In this case, the government wanted to increase the export base by granting export subsidies. You can get assistance from IndiaFilings' GST professionals with export bond filing or GST LUT filing.

Any registered person may submit an export bond or LUT under GST RFD 11 in accordance with the CGST Rules, 2017 without having to pay the integrated tax. They may apply for LUT if

1. They intend to supply goods or services to India or overseas or SEZs
2. Are registered under GST
3. They wish to supply goods without paying the integrated tax.

Documents Required for LUT under GST

Any person registered under GST is eligible to submit a LUT as long as they haven't been executed for tax evasion of more than Rs. 250 lakh or any other crime.

1. LUT cover letter - request for acceptance - duly signed by an authorized person
2. Copy of GST registration
3. PAN card of the entity
4. KYC of the authorized person/signatory
5. GST RFD11 form
6. Copy of the IEC code
7. Canceled Cheque
8. Authorized letter

Process for Filing LUT in GST?

The procedures for filing and furnishing bonds when exports are done without paying taxes are listed below.

The jurisdictional and supplying criteria should be reviewed. Additional paperwork about the bank guarantee needs to be produced if a bond is to be submitted.

Prepare the Bonds' required documentation. For bonds, the following paperwork must be submitted:

For Bonds:

• Form RFD-11
• Bond on stamp paper
• Bank guarantee
• Authority letter
• Other supporting documents

Each consignment does not require its own bond to be provided. He can instead provide a running bond. A running bond enables the exporter to apply the same terms and conditions from the current shipment to the subsequent consignment.

An official document should be created with a duplicate copy.

To avoid any rejection, the next step is to submit the documents to the department and have them verified by an appropriate official.

An official letter acknowledging receipt of the document must be issued by the officer after it has been filed.

Eligibility for Filing LUT in GST

Who can use Letter of Undertaking (LUT)?

Anyone who is a registered taxpayer and exports goods and services may use a Letter of Undertaking. Any individual who has been charged with tax evasion for an amount totaling Rs. 250 lakh or more is ineligible.

Such LUTs have a one-year validity period, and exporters must provide new LUTs for each fiscal year. If the requirements outlined in the LUTs are not met within the allotted time frame, the exporter's privileges will be terminated and they will be required to post bonds.

If the export is being made without the payment of IGST, other assesses should provide bonds. Bonds and LUTs are used for:

1. Zero-rated supply to SEZ without payment of IGST
2. Export of goods to a country outside India without the payment of IGST.
3. It is providing services to a client in a country outside India without paying IGST.

Filing of Letter of Undertaking (FORM GST RFD-11)

The Form RFD-11 is filed in the format below: 

• Registered Name
• Address
• GST No.
• Date of furnishing
• Signature, date, and place
• Details of witnesses (Name, address, and occupation)

Export Bond for GST

Entities that, due to the aforementioned requirements, are not qualified to submit a Letter of Undertaking must provide an export bond and a bank guarantee. Based on their projected tax due from their own assessments, the applicant must pay the amount of tax associated with the export.

Export bonds must be provided on non-judicial stamp paper with the appropriate value according to the state in which they are being provided.

Additionally, exporters may provide a running bond, which eliminates the requirement that an export bond be performed for each export transaction. However, the exporter is required to provide a new bond to cover the increased responsibility if the unpaid export tax liability at any point exceeds the amount of the original bond.

Along with an export bond, a bank guarantee may be required. Generally speaking, the bank guarantee's worth shouldn't be more than 15% of the bond's value. However, the jurisdictional GST Commissioner may waive the bank guarantee that must be given with the export bond depending on the exporter's track record.

Form for Bonds:

• Registered Name
• Address
• Amount of bond furnished.
• Date of furnishing
• Amount of bank guarantee furnished.
• Signature, date, and place
• Details of witnesses (Name, address, and occupation)