Comprehensive Guide to LUT Filing for FY 2025-26: Steps, Benefits, and Compliance Tips

Introduction

Exporters and businesses supplying goods or services to Special Economic Zones (SEZs) must renew their Letter of Undertaking (LUT) annually. The GST Portal has now activated the LUT filing for FY 2025-26, allowing taxpayers to file and ensure uninterrupted exports and SEZ supplies without paying Integrated Goods and Services Tax (IGST).

This comprehensive guide covers the importance of LUT filing, the step-by-step filing process, key benefits, and compliance tips to ensure smooth business operations. Let’s dive into the details of LUT filing for FY 2025-26 and why it is crucial for your business.

What Is LUT Filing?

Letter of Undertaking (LUT) is a declaration filed by registered taxpayers under GST, allowing them to export goods or services and supply to SEZs without paying IGST. By filing an LUT, businesses can avoid the hassles of upfront tax payments and subsequent refund claims, streamlining their compliance process.

Under GST, LUT filing is mandatory for exporters who wish to avail of this tax exemption benefit. The LUT must be filed every financial year, and the validity of the LUT expires on March 31 of the current financial year. Therefore, taxpayers must renew their LUT annually to maintain compliance.

Why Is LUT Filing Important for FY 2025-26?

Filing an LUT for FY 2025-26 is essential for exporters and SEZ suppliers for the following reasons:

1. Avoid IGST Payment: Without a valid LUT, businesses must pay IGST upfront on exports or SEZ supplies and claim a refund later. This ties up working capital and adds compliance burdens.
2. Simplify Export Process: LUT filing eliminates the need for export bonds or guarantees, making the export process hassle-free.
3. Ensure Compliance: Renewing your LUT ensures you stay compliant with GST regulations and avoid penalties or disruptions in operations.
4. Uninterrupted Business Operations: Early filing ensures seamless exports and supplies beyond March 31, 2025.

Step-by-Step Guide to File LUT for FY 2025-26

Follow these steps to file your LUT for FY 2025-26 on the GST Portal:

Step 1: Log in to the GST Portal

• Visit the GST Portal at gst.gov.in and log in using your credentials (Username and Password).

Step 2: Navigate to the LUT Filing Section

• After logging in, go to Dashboard > Services > User Services > Furnish Letter of Undertaking.

Step 3: Select Financial Year

• Choose the financial year as 2025-26 from the dropdown menu to initiate the LUT filing process.

Step 4: Fill in the Required Details

• Provide all the necessary information, such as:
  
  • GSTIN
  • Business details
  • Authorized signatory details

Step 5: Attach Supporting Documents

• Upload the required documents, including the LUT for the previous financial year (FY 2024-25), if applicable.

Step 6: Complete Declarations

• Tick the declaration checkboxes to confirm compliance with GST laws and agree to fulfill export obligations without IGST payment.

Step 7: Submit the Application

• Click on the Submit button to complete your LUT application. Upon successful submission, the portal generates an Application Reference Number (ARN).

Step 8: Download the ARN

• Save the ARN for your records, as it will serve as your LUT number. This number must be mentioned on all invoices for exports or SEZ supplies made without IGST payment.

Documents Required for LUT Filing

Ensure the following documents are ready before filing your LUT for FY 2025-26:

1. Previous Year’s LUT (FY 2024-25), if applicable
2. PAN Card of the business
3. GSTIN certificate
4. Authorized signatory’s details and signature
5. Declaration form as per GST rules

Benefits of Filing LUT for FY 2025-26

1. Tax-Free Exports: Avoid paying IGST on exports or SEZ supplies, enhancing liquidity and cash flow.
2. Simplified Refund Process: Eliminate the need to claim refunds for IGST paid, reducing administrative effort.
3. Cost Savings: Save on compliance costs associated with furnishing export bonds or guarantees.
4. Ease of Compliance: Filing LUT online is a quick and straightforward process.
5. Business Continuity: Timely filing ensures uninterrupted export operations beyond the expiry of the previous year’s LUT.

Common Challenges in LUT Filing and Their Solutions

1. Portal Errors

• Solution: Clear browser cache, switch to a different browser, or try accessing the portal during non-peak hours.

2. Missing Documents

• Solution: Keep all required documents ready before starting the filing process to avoid delays.

3. ARN Delays

• Solution: File your LUT well in advance to prevent last-minute bottlenecks caused by high portal traffic.

Key Reminders for LUT Filing

1. File Early: Avoid last-minute rushes by filing your LUT for FY 2025-26 early. Delayed filing may disrupt business operations.
2. Track ARN Status: Keep an eye on your application status and ensure the ARN is generated successfully.
3. Invoice Compliance: Always mention the ARN on invoices for exports or SEZ supplies to comply with GST laws.
4. Annual Renewal: Remember, LUT filing is an annual requirement, and the previous year’s LUT expires on March 31, 2025.

Final Thoughts on LUT Filing for FY 2025-26

Filing your LUT for FY 2025-26 is crucial to ensure seamless exports and avoid unnecessary tax payments. By doing so, businesses can enhance their cash flow, reduce compliance burdens, and focus on growth.

Make sure to file your LUT early and follow the steps outlined in this guide for a hassle-free experience. Stay compliant and keep your export operations running smoothly. If you face any issues, refer to the GST Helpdesk or user manual available on the GST Portal.

Act now to avoid disruptions in your business operations. File your LUT for FY 2025-26 today! Click here.