A letter of Undertaking (LUT) in goods and services tax (GST) is a document exporters can file to export products without paying the integrated GST. Integrated GST is a destination-based tax the centre collects on the interstate import and export of products. It is levied by the centre, which then shares it with the state where the product was consumed.
However, before the products are exported or imported, furnish LUT must be furnished without paying IGST. If the exporter fails to furnish it, they must pay the IGST or an export bond.
One can file LUT online by logging in to the GST portal and filling out the form GST RFD-11. Continue reading to know how to apply for LUT in GST.
The LUT form is filled in the GST RFD 11 format. The format contains details of the exporter, the self-declaration, and independent witnesses. The form also requires a digital signature and acceptance by the jurisdictional officer.
Exporters can fill out the LUT online by following these steps:
LUT in GST ensures exporters comply with the GST norms and pay due tax on their exports. It enables businesses to claim the benefits of no tax liability on exports. It simplifies the compliance process for exporters since they can file LUT online.
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The limit of LUT under GST is that the applicant should not be prosecuted for any offence under the CGST or IGST Act or any other law. And if prosecuted, the amount of tax evaded should not exceed INR 250 lakhs. The exporter must furnish a bond if the conditions are unmet.
You require the following documents for filing LUT:
Here are the eligibility criteria for the GST composition scheme:
Besides this, the business should not be a casual taxable person, nor should they be manufacturing pan masala, ice cream, or tobacco. They shouldn’t supply any non-taxable or exempt products either.