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What is GST LUT Filing?
The letter of undertaking is a document where the user declares that all GST obligations have been met. It is provided if export is made without paying the IGST. Additionally, Notification No. 37 /2017 – Central Tax To export products, services, or both without paying IGST, you must provide LUT. If the exporter does not supply the LUT, he must pay the IGST or post an export bond. Previously, LUTs could only be lodged in person at the appropriate GST office. However, the government has made the LUT filing process more accessible by making it available online.
Who can utilise Letters of Undertaking (LUT) and Bonds?
LUTs can be used by any registered taxpayer exporting goods or services. Any person who has been prosecuted under the act for tax evasion for an amount of Rs. 2.5 crores or more are not eligible to provide LUTs.
The validity of such LUTs is limited to one year (till the end of the financial year). Every financial year, an exporter who provides LUTs must provide new LUTs. If the LUT conditions are not met within the timeframe, the privileges are removed, and the exporter is required to post bonds.
If the export is made without payment of IGST, bonds should be provided to all other assesses (together with those who have been prosecuted for tax evasion of Rs. 2.5 crores or more under the GST legislation). Letters of the undertaking can be provided and submitted online via the GST portal.
At the same time, the bonds must be filled out manually because a hard copy must be sent to the department. LUT/Bonds can be used in the following transactions:
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Zero-rated supplies to SEZ without IGST payment
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Payment of IGST on products exported to a country outside India
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Providing services to a client outside of India without paying the IGST
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