08 Oct


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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