08 Oct
LETTER OF UNDERTAKING LUT
GST Alert
Submit
Undertaking (LUT) letter for the financial year 2021-22 by 31.03.2021
·
Interpretation
Letter of
Undertaking (LUT): Export without paying tax can be done only after filing a
bond or Letter of Undertaking (LUT) applicable to the exporter. There was a lot
of ambiguity about what exports were to be done without paying IGST.
As per Rule
96A of CGST Rules-2017 which was notified as per notification number 16/2017
dated 07-07-2017, any registered person who has opted to export goods or
services for export without paying IGST will submit before export. , Bonds or
LUTs in GST RFD-11.
·
Criteria
Except for
the CGST Act or the Integrated Goods and Services Tax Act, 2017, the purpose of
exporting goods under LTUT is extended to all registered persons for the
purpose of providing goods or services for export without paying integrated
tax. Or any existing law and in such cases, the amount of tax paid is more than
two and a half lakh rupees.
The
government has proposed in the Union Budget 2021 that the refund (i.e.
exemption) of GST paid on exports of goods and/or services will be limited to
notified taxpayers or goods/services.
As a result
of this change, many businesses that previously sought tax-exempt payments for
export supplies will now have to resort to exports without paying taxes under
bonds or letters of undertaking and, later, claim refunds of unused input
credits.
New LUT for
FY 2021-2022 should be available on 01-04-2021 or before 01-04-2021 for export
after 01-04-2021.
GSTN Common
Portal has activated the facility to submit LUT for the financial year 2021-22.
·
Date due: -
Submitting/renewing
an initial letter is a very simple and user-friendly process. Its validity is
from the date of filing till next 31st March.
·
Proof of submission
Application
with reference number (ARN), its acknowledgement will be deemed to have been
accepted LUT once it is generated online. (Circular No. 40/14/2018-GST) LUT is
considered to be accepted by GSTN. LUT approval is immediate so no need to
wait.
The author can be approached at santoshpatil@alltaxfin.com or 9769201316
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