Last updated on February 7th, 2023 at 04:10 pm
Gentle reminder! Apply for fresh LUT for FY 2022-23
Option for renewal of LUT for FY 2023-24 has been activated on the GSTN portal
A letter of undertaking is a pre-requisite for exports without the payment of IGST. Government approves the applications of LUT keeping in mind the utmost priority.
If LUT is not accepted within three working days after the application is submitted. The acknowledgment generated upon submission of application will be deemed accepted. (Refer CGST Circular no. 8/8/2017 dated 4th October 2017)
The exporter should mention the ARN while raising an invoice for export/SEZ.
It is the document that the taxpayer needs to provide if he intends to export the goods or services without payment of integrated goods and service tax (IGST). It needs to be furnished in Form GST RFD-11 on the common portal. Initially, LUT could only be furnished offline with the jurisdictional GST Commissioner.
Note: Export here includes the supply of goods or services to the Special Economic Zone.
What undertaking is the taxpayer giving to the Government by furnishing LUT?
LUT is an undertaking that binds the taxpayer to pay the tax due along with the interest u/s 50(1) within 15 days or such extended period as may be allowed by the Commissioner in the following two conditions
If actual goods are not exported or services are not provided within three months from the date on which the invoice for export was issued.
For e.g. If the export invoice is issued on 1st April 2023 and goods are not exported up to 30th June 2023 then the taxpayer will have to pay the tax due and interest us/ 50(1) within 15 days from 30th June 2023 i.e. 15th July 2023.
If the payment for such goods or services exported is not received within 1 year from the date on which the invoice for export was issued.
For e.g., If the export invoice was issued on 1st April 2023 and the payment for the same was not received up to 31st March 2024 then the taxpayer will have to pay the tax due and interest us/ 50(1) within 15 days from 31st March 2024 i.e 15th April 2024
Note: Payment for export can be in convertible foreign exchange or in INR wherever permitted by RBI.
Validity of LUT
The validity of a LUT is only for a financial year. A fresh application for LUT needs to be made every year in FORM GST RFD-11 on the common portal for the next financial year. As per CGST Notification No. 37/2017 dated 4th October 2017.
If a registered person was granted LUT for FY 2022-23, then the validity of the LUT will get over on 31st March 2023. In order to continue exports without any disruption, it is a gentle reminder to all the registered persons to apply for a fresh LUT for the financial year 2023-24 through GSTN Portal.
Note: The option for renewal of LUT for FY 2023-24 has been activated on the GSTN portal.
What happens if the exporter fails to provide LUT?
LUT needs to be furnished on the GSTN portal before exporting goods or services. In case if the exporter fails to furnish the LUT prior to export, then the taxpayer will have to either pay IGST or provide an export bond.
When LUT will be deemed withdrawn?
LUT will be deemed to be withdrawn in the following cases
⇒ If the goods were not exported within three months from the date of invoice ….. As per Rule 96A
⇒ If the payment is not received within one year from the date of invoice ….. As per Rule 96A
How LUT will be restored?
When the tax due along with interest @ 18% as per section 50(1) is paid within the prescribed time limit. LUT will be restored.
Exports will be done after the payment of IGST or under bond with a bank guarantee for the period the LUT is withdrawn.
Steps to be followed to furnish a Letter of Undertaking(LUT)
⇒ Login with valid credentials on the GSTN portal.
⇒ Navigate to Services>User Services>Furnish Letter of Undertaking(LUT)
⇒ Select the financial year from the dropdown list in the “LUT applied for the financial year”.
⇒ Under the document upload section, one can upload the Previous Period’s LUT if any.
- Export of goods or services without payment of tax based on LUT will be done within the prescribed time limit (3 months) as per Rule 96A.
- Exporters will abide by all the provisions of the GST Act & rules in respect of exports.
- Exporter will IGST along with interest @18% p.a. from the date of invoice to the date of payment in case it fails to comply with Rule 96A.
⇒ Information of two Independent Witnesses
⇒ Sign & file with EVC or DSC
⇒ Upon successful submission of the above application for LUT. An acknowledgment will be generated which can be downloaded.
How to download/check the LUT furnished for the previous year?
⇒ Login with valid credentials on the GSTN portal.
⇒ Navigate to Services>User Services>View my Submitted LUTs
⇒ Select the financial year from the dropdown list in the View my Submitted LUTs
Disclaimer: The above content is for general info purpose only and does not constitute professional advice. The author/ website will not be liable for any inaccurate / incomplete information and any reliance you place on the content is strictly at your risk.
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