The purpose of a Letter of Undertaking (LUT) is to:

1. LUT ensures that the exporter complies with the GST laws and regulations.

2. LUT facilitates exports by allowing exporters to export goods or services without paying tax.

3. LUT provides a guarantee to the government that the exporter will comply with the GST laws and regulations.

4. LUT simplifies the export process by eliminating the need for exporters to furnish a bond.

5. LUT reduces the compliance burden on exporters by minimizing the number of documents required.

Eligibility:

To be eligible for Letter of Undertakings (LUT), exporters must:

1. Have a good compliance record

2. Not have any pending tax liabilities

3. Not have been prosecuted for any offense under the GST Act

4. Have a valid GSTIN

Steps to obtaining a Letter of Undertaking (LUT) in GST:

·       Log in to the GST portal

·       Navigate to the "Services" tab

·       Select "User Services" and then "Furnish LUT"

·       Fill in the required details, including:

Ø  GSTIN

Ø  Financial year

Ø  Details of exports

Ø  Details of Witness

Ø  Sign the declaration through Electronic Verification Code (EVC)

·       Submit the Application

·       Approval and Issuance of Letter of Undertaking (LUT)

Validity:

Letter of Undertaking (LUT) is valid for one financial year i.e. April 1 to March 31

FREQUENTLY ASKED QUESTIONS:

Q1. Who can submit Letter of Undertaking (LUT)?

-  Exporters, suppliers of goods or services, and taxpayers who want to supply goods or services without payment of tax can submit Letter of Undertaking (LUT).

Q2. What are the benefits of Letter of Undertaking (LUT)?

-  Letter of Undertaking (LUT) allows exporters to export goods or services without paying tax, simplifies the export process, and reduces compliance burden.

Q3. How long is Letter of Undertaking (LUT) valid?

-  Letter of Undertaking (LUT) is valid for one financial year i.e. from April 1 to March 31.

Q4. Can Letter of Undertaking (LUT) be cancelled?

- Yes, Letter of Undertaking (LUT) can be cancelled by the jurisdictional officer if the exporter fails to comply with the GST laws and regulations.

Q5. What is RFD 11?

-  Any registered person availing the option to supply goods or services for export without payment of IGST needs to furnish, a Letter of Undertaking (LUT) in Form GST RFD-11.

Q6. Is it mandatory to mention Letter of Undertaking (LUT) number on invoice?

- For goods and services exported without payment of GST, it should be mentioned on the invoice that it is “Supply meant for export under LUT without payment of IGST.

 Q7. When to apply/file an LUT?

- Letter of undertaking (LUT) has to be filed /submitted online before exporting the goods or services.