How to File Letter of Undertaking (LUT) in GST? Explained

An LUT a.k.a a Letter of Undertaking in GST is to be provided in the form of a GST RFD 11 under the rule 96 A. In a letter of understanding in GST, an exporter has to provide a declaration that he will fulfil the requirements that are mentioned under the GST to export without having to make any IGST payments.

 Who should file a Letter Of Undertaking in GST?

All those exporters who have their goods and services registered with the GST need to submit a Letter Of Undertaking in GST. However, those exporters who have been involved in some sort of offences or tax evasion of more than Rs. 250 lakhs under the CGST Act or the Act for Integrated Goods and Services or any other pre-existing law are not eligible to file for a Letter Of Undertaking in GST. In this type of case, the exporter will have to provide an Export bond.

The main motive of the government behind the Letter Of Undertaking in GST was to provide reliefs on export in order to expand the export base. Under the CGST rules, anyone who is registered can provide an Export Bond or a Letter Of Undertaking in GST RFD 11 without having to pay any integrated tax. The conditions under which they can apply for a Letter Of Understanding in GST are as follows:

• They want to supply goods and services either to India or overseas.
• They are already registered under GST
• They want to supply the goods and services without having to pay the integrated taxes.

Documents needed to register for a Letter of Undertaking in GST

Anyone who is registered under GST can submit a Letter Of Undertaking in GST, if he has not been involved in any sort of tax evasions that exceeds Rs. 250 lakh or some other offence. The documents required for the registration of a Letter Of Undertaking in GST are as follows:

1. A copy of registration of GST
2. PAN Card of the applicant
3. The cover letter of the Letter Of Understanding in GST which is signed by an authorized official
4. KYC details of the signatory
5.  GST RFD 11 Form
6. A Copy of the IEC Code
7. A Cancelled Cheque
8. An Authorized Letter

Procedure for the filing of Letter Of Undertaking in GST

In order to file a Letter Of Undertaking in GST when the exports are made without having to pay any taxes, the steps that are listed below should be followed to file and furnish bonds.

Check your jurisdiction and furnishing requirements in order to file a bond. Also, all the additional documents that are needed to file the bond must be prepared beforehand. These documents may include: RFD 11 Form, A BOnd on stamp paper, A guarantee from the bank, an Authority letter, and some more supporting documents.

You don't have to provide a new bond everytime you export a new consignment.  Rather than doing that over and over again, you can make use of a running bond. A running bond is quite beneficial as it helps the exporter to carry the same terms and conditions forward in the bond when he exports the next consignment.

 Along with the original copy, a duplicate copy should also be prepared. The next step in the list to file for Letter Of Undertaking in GST is submission of documents to the department and getting them verified by a relevant officer in order to prevent any sort of rejection afterwards. Once the filing has been done, the officer will issue a signed letter acknowledging all the documents that have been submitted.

Who can file for a Letter Of Undertaking in GST?

Letter Of Undertaking in GST Can be used by any taxpayer who has registered himself to the GST and deals with the exporting of goods and services. However, anyone who has been a part of tax evasion that exceeds Rs.250 lakhs and someone who has been involved in some sort of offence, can not file for a Letter Of Undertaking in GST.

The validity of any such Letter Of Undertaking in GST is one year and the exporter will have to provide a fresh Letter Of Undertaking in GST for each and every financial year. If all the conditions that are mentioned in the Letter Of Undertaking in GST are not satisfied within the specified time limit, then in that case all the privileges will be revoked and the exporter will have to refurnish the bonds provided by him. Bonds can be used for the following listed reasons:

• A Zero-rated supply to SEZs without having to make any payment to the IGST
• TO be able to export the goods to foreign country without paying to IGST
• Providing services to a client outside of India without having to pay te IGST

Filing the Letter Of Undertaking in GSTa.k.a. GST RFD 11

 The form RFD 11 is filed in the format listed below in order to get your Letter Of Undertaking in GST:

• Name that has been registered
• Address of the applicant
• GST Number
• Furnishing Date
• Date, place and Signature
• All the details of the witnesses like name, address and occupation

GST Export Bonds

An export bond is furnished by those entities who are ineligible for submitting a Letter of Undertaking in GST because they were unable to meet some of the requirements that were listed in it. In order to avail an export bond, the applicant will have to cover the amount of tax that is involved in the export according to tax-liability self-assessment.

In order to furnish an export bond, a non-judicial stamp paper is required. Its value will be applicable by the State in which it will be furnished. Moreover, a running bond can also be furnished by these exporters and it doesn't even need to be executed for every export transaction.

Along with an export bond, a bank guarantee can also be mandated for filing a Letter of Undertaking in GST. The value of the bank guarantee does not exceed 15% of the amount of the bond. The different forms for Bonds are as follows:

• Registered name of the applicant
• Address of the applicant
• Total amount of furnished bond
• A furnished bank guarantee
• Date, place and signature of the candidate
• Witness Details like address, occupation and name