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Letter of Undertaking Under GST
Letter of Undertaking is abbreviated as LUT. The Letter of Undertaking is a document submitted by the exporter in order to export goods or services without the payment of taxes. In case the LUT is not filed, the exporter may export by payment of IGST and then claim the refund of tax paid. Filing LUT is convenient than refund mode as the exporters do not wish to indulge into hassles of refunds and block their funds. The eligibility criteria to apply for LUT is comparatively relaxed than to the erstwhile system.
Letter of Undertaking is filed online using the form GST RFD 11. By filing LUT, the exporter undertakes that all the requirements prescribed for this route will be fulfilled by him.
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Process of Filing LUT under GST
Day 1
- Discussion and collection of basic Information
- Collection of required documents
Day 3 - 4
- Preparation for the Letter of Undertaking
- Online Submission of LUT
Day 5
- Sharing Acknowledgment bearing ARN
Documents Required for LUT Filing
01
Entity's PAN Card
A Copy of PAN card of the exporter entity
02
KYC of Authorized Signatory
A Copy of PAN card and Aadhar card of partners/directors
03
Witnesses
Information of at least two witnesses along with the address proof and PAN
04
GST Registration
GST Registration Certificate of the exporter is required
05
IEC Certificate
The IEC certificate must be submitted
06
Cancelled Cheque
A Copy of cancelled cheque of current account of exporter
Why Should You Register a Private Limited Company?
Exports without Tax Payment
By filing LUT under GST, an exporter can export goods or services without paying the taxes. If LUT is not filed, the exporter must first pay the required tax while making exports and then claim a refund to avail benefit of zero-rated exports.
An Entire Financial Year Validity
The Letter of Undertaking, once filed is valid for the whole financial year in which it is filed. Hence, unlike refund process, an exporter does not need to go through the procedural requirements every time an export consignment is carried out.
Saves Working Capital
The regular exporters are at a huge benefit by filing LUT online as the refund process under another route is a time-consuming process. During which the bunch of capital is blocked in the form of a due refund. With this mode, the capital is free to be utilized for other necessary requirements. It also reduces the cost of exports.
Simple and Online Process
The filing of LUT and its acceptance, both are made online since April, 2018. The applicant does not need to visit the officers for acceptance. The whole process can be completed online by submitting a few required documents.