A crucial document under India's GST regime is the GST LUT (Letter of Undertaking), which permits exporters to make zero-rated supply, that is, exports or supplies to Special Economic Zones (SEZs) without having to pay the Integrated GST (IGST) up front. By removing the need for tax payments followed by refunds, it streamlines compliance and improves cash flow for firms. GST LUT, which is submitted on Form GST RFD-11, is a self-declaration made by registered exporters committing to exporting goods and services on time and in accordance with GST regulations. It lasts for a single fiscal year.

By overseeing the complete online filing procedure, including document collecting, portal uploading, and compliance checks, Taxesquire assists with GST LUT. 

Exporters can streamline their export activities and improve their financial operations by filing a Letter of Undertaking (LUT), which offers a number of benefits.

Tax-Free Export:

By choosing the LUT, exporters can complete their export operations without having to worry about paying taxes right now. The alternative, in which taxes are paid and then claimed as refunds for exports with a zero rating, is in opposition to this.

Simplified Procedure:

Exporters can avoid the hassles of filing tax returns or following up with tax officials by using the LUT certificate. This results in significant operational simplicity and time savings.

Liberated Resources:

The LUT certificate consistently offers regular exporters a benefit. The LUT is valid for the full fiscal year after it is filed. Because of its endurance, exporters can concentrate on their primary business operations by reducing the need for repetitive filings.

Unblocked Working Capital:

Exporters can still access funds that would have been frozen as tax payments. For small and medium-sized businesses (SMEs) struggling with funding and working capital constraints, this is extremely important.

Criteria for eligibility

The following are among the requirements for eligibility when applying for a LUT:

Any registered taxpayer involved in exporting goods and services may use the Letter of Undertaking (LUT). However, this option is not available to those who are being prosecuted for tax evasion of at least Rs. 250 lakh.

Intent to Supply:

The applicant must have the intention of supplying goods or services to Special Economic Zones (SEZs), other countries, or within India.

GST Registration:

In order to profit from a LUT, an entity must register under the GST structure.

Tax-Free Supply:

One of the most important prerequisites for LUT application is the wish to supply goods free from integrated taxation.

The procedure for creating LUT in GST

1. Go to the GST Portal 

2. Select the supply LUT (Letter of undertaking) after clicking on the service tab and then user service.

3. Choose the file by selecting LUT applied for the fiscal year from the drop-down list.

4. Provide the required information in the GST RFD 11.

5. Self-disclosure

6. Enter the filling location, click "Save," and then select "Preview."

7. Send a letter of undertaking to DSC that has been signed by the designated signatory.

For what reason is it used?

The LUT in GST allows the exporter to export goods and services without having to pay taxes. If not, the exporter must file zero-rated exports to receive a refund and pay taxes.

1. As a burden on the dealer, it is valid for a year. He does not need to submit an application for each shipment's documents.

2. LUT in GST aids in taxpayer exemption. If a payment is paid in advance and refunded later, capital becomes frozen for the specified amount of time.

When a LUT is generated online in GST

A small number of documents must be submitted, even if none must be uploaded.

1. Accepted recognition of LUT in the prior year's GST.

2. Proof of address, identification, and witness information.

3. A copy of the witness's proof of consent for the LUT.

4. LUT in GST should be included on the letterhead.

5. A partner, managing director, company secretary, or any other individual duly authorised by the business signs the LUT in GST.

6. Since a Letter of Undertaking is only valid for one fiscal year, LUT in GST must be generated for an even fiscal year.

7. The Letter of Undertaking is not available to anyone with an annual total revenue of more than 2.5 crores under the GST and Integrated Goods and Services Act.

When an offline LUT is built

1. A copy of the entity's PAN card.

2. The Letter of Undertaking, duly signed by the designated individual

3. Rejected Check

4. A duplicate of the GST RFD 11 form

5. A letter of authorisation

6. Registration for GST 7. Import Export Code (IEC)

8. Each undertaker's signature

9. A letter of board resolution granting the partners' or the director's permission to submit a LUT

10. Every Witness

For exporters, navigating the complexity of LUT (Letter of Undertaking) filing has never been easy. Our speciality at TaxEsquire is expediting the procedure so you can concentrate on growing your export business. Our skilled experts are prepared to assist you with the smooth submission of the GST RFD-11 form since they are aware of the subtleties of the GST laws. From document preparation to online submission, we provide end-to-end support, guaranteeing correctness and compliance at every stage.

You may enjoy the advantages of tax-free exporting without having to deal with complicated processes when TaxEsquire is on your side. Start a more seamless export process with us by streamlining your LUT filing in GST right now.