A Complete Guide to LUT Filing under GST

Exporting goods or services under the Goods and Services Tax (GST) regime requires compliance with specific regulations to ensure smooth operations. One such requirement is the Letter of Undertaking (LUT), which allows exporters to ship goods or services without paying Integrated Goods and Services Tax (IGST) upfront. This guide will walk you through everything you need to know about LUT filing, its benefits, and how to file it online on the GST portal.

What is LUT Filing?

A Letter of Undertaking (LUT) is a legal document that exporters submit to the GST authorities. It enables them to export goods or services without paying IGST at the time of shipment. Instead, the exporter undertakes to fulfill all export obligations within a specified time frame, typically three months from the date of the export invoice.

Why is LUT Filing Important?

1. Avoid Upfront IGST Payment:
   Exporters can ship goods or services without paying IGST, improving cash flow and reducing financial burden.
2. Simplified Compliance:
   LUT filing replaces the earlier requirement of submitting bonds or bank guarantees, making the process faster and more efficient.
3. Legal Requirement:
   Under GST laws, all registered taxpayers exporting goods or services must file an LUT to avoid penalties.

Who Needs to File an LUT?

Any registered taxpayer exporting goods or services to:

• Countries outside India, or
• Special Economic Zones (SEZs)

must file an LUT. This applies to both goods and service exporters.

Benefits of LUT Filing

1. No IGST Payment:
   Exporters can avoid paying IGST upfront, which is especially beneficial for small and medium-sized businesses.
2. Improved Cash Flow:
   By deferring IGST payments, businesses can allocate funds to other operational needs.
3. Streamlined Process:
   The online filing process on the GST portal saves time and reduces paperwork.
4. Transparency:
   The entire process is transparent, with real-time updates and acknowledgments.

When to File an LUT?

An LUT must be filed before exporting goods or services. It is valid for the entire financial year unless revoked or canceled by the taxpayer or tax authorities. Exporters must file a new LUT at the beginning of each financial year.

Documents Required for LUT Filing

1. GST Registration Number:
   Ensure your business is registered under GST.
2. Details of Exports:
   Information about the goods or services being exported.
3. Witness Information:
   Name, occupation, and address of two independent witnesses.
4. Digital Signature Certificate (DSC):
   Required for companies and LLPs to sign the LUT.

Step-by-Step Process to File LUT on the GST Portal

Filing an LUT on the GST portal is a straightforward process. Follow these steps:

Step 1: Login to the GST Portal

• Visit the official GST portal: https://www.gst.gov.in/.
• Log in using your credentials (username and password).

Step 2: Navigate to the LUT Section

• Go to the ‘Services’ tab.
• Select ‘User Services’ > ‘Furnish Letter of Undertaking (LUT)’.

Step 3: Select the Financial Year

• Choose the financial year for which you are filing the LUT (e.g., 2023-24).
• If you have previously filed an LUT manually, upload the document by clicking ‘Choose File’.
  • Ensure the file is in PDF or JPEG format and does not exceed 2 MB.

Step 4: Fill in the LUT Form (GST RFD-11)

• Complete the form with the following details:
  
  1. Self-Declaration:
     • Tick the boxes to declare that:
       • Exports will be completed within 3 months (or an extended period allowed by the Commissioner).
       • You will abide by GST laws.
       • You will pay IGST and interest (18% per annum) if export obligations are not met.
  2. Witness Information:
     • Provide the name, occupation, and address of two independent witnesses.

Step 5: Save and Preview

• Enter the place of filing.
• Click ‘Save’ and then ‘Preview’ to verify the details before submission.
  • Note: Once submitted, the form cannot be revised.

Step 6: Sign and Submit

• Sign the form using one of the following options:
  
  1. Digital Signature Certificate (DSC):
     • Click ‘Sign and File with DSC’.
     • Use the registered DSC of the authorized signatory.
  2. Electronic Verification Code (EVC):
     • Click ‘Sign and File with EVC’.
     • Enter the OTP sent to the registered mobile number and email address.
     • Note: Companies and LLPs must use DSC.
• After submission, a unique ARN (Application Reference Number) will be generated.
• A confirmation message will be sent to the registered email and mobile number.

Step 7: Download Acknowledgment

• Click ‘Download’ to save the acknowledgment for future reference.

Viewing Submitted LUTs

To view previously submitted LUTs:

• Go to ‘Services’ > ‘User Services’ > ‘View My Submitted LUTs’.
• Select the period and click ‘View’ to see the details.

Key Points to Remember

1. Validity:
   • LUT is valid for the entire financial year unless revoked.
2. Re-filing:
   • A new LUT must be filed at the beginning of each financial year.
3. Non-Compliance:
   • Failure to fulfill export obligations may result in penalties, including payment of IGST and interest.

Frequently Asked Questions (FAQs)

1. What is the full form of LUT?

LUT stands for Letter of Undertaking.

2. Can I revise a submitted LUT?

No, once an LUT is submitted, it cannot be revised. Ensure all details are accurate before submission.

3. Is LUT mandatory for all exporters?

Yes, all registered taxpayers exporting goods or services must file an LUT.

4. What happens if I fail to fulfill export obligations?

You will be required to pay IGST along with interest at 18% per annum.

Conclusion

LUT filing is a critical compliance requirement for exporters under GST. By following the step-by-step process outlined in this guide, you can easily file your LUT online and enjoy the benefits of exporting without paying IGST upfront. Simplify your export process, improve cash flow, and stay compliant with GST laws.

For more information, visit the official GST portal or consult a tax professional. Stay ahead in your export business with QuickComply – your trusted partner in GST compliance.