LUT under Exports

As per the GST Law exports are meant to be zero rated supply.The concept of zero rating of supplies requires the supplies as well as the inputs or input services used in supplying the supplies to be free of GST. This is done by employing the following means:
a) The taxes paid on the supplies which are zero rated are refunded;
b) The credit of inputs/ input services is allowed;
c) Wherever the supplies are exempted, or the supplies are made without payment of tax, the taxes paid on the inputs or input services i.e. the unutilised input tax credit is refunded.

  • What is Zero Rated Supply

Zero rated supply means any of the following supplies of goods or services or both,
namely: ––
a) export of goods or services or both; or
b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

  • What is LUT or Letter of Undertaking

A Letter of Undertaking is an undertaking by authorized persons of an entity that they will not pay tax on their export sales and will always abide by GST laws at all times. In case of any default, all the undertakers will jointly or severally be liable for any penalty or other consequences. Under GST regime, there are only two ways possible to export goods or services from India. The two ways are as follows:

⇒ Export without payment of GST
⇒ Export with payment of GST.

If any taxpayer wants to export without payment of IGST then he shall need to file a bond or a letter of undertaking to the department. A letter of undertaking (LUT) is the document format of which is being prescribed under form GST RFD 11 under rule 96A.

  • Who can apply for LUT ?

The facility of export under LUT has been now extended to all registered persons who intend to supply goods or services for export without payment of IGST 

Exception: The persons who have been prosecuted for any offence under the CGST Act or the IGST Act, 2017 or any of the existing laws and the amount of tax evaded is 2,50,000 or more.

 

 

Requirements for filing LUT online

  • Documents Required for GST Registration

    Documents required for filing LUT online

    • GST Login Credentials
    • Copies of Export Bill/Invoice
    • Previous Letter of Undertaking (LUT), if any
    • Details of two independent witnesses
    • DSC in case of company & LLP

Procedure for filing LUT Online

  • Step 1

    Submit your details in the form provided above & Our Expert team will get in touch with you on the given contact details.

  • Step 2

    Send the requisite documents & details by mail or whatsapp

  • Step 3

    Filling of LUT in appropriate form online by our team

  • Step 4

    Generation of Acknowledgement and ARN will be sent by the GST portal on registered contact details

Frequently Asked Questions

Yes, supplies made to an SEZ unit or a SEZ developer
are zero rated. The supplies made to an SEZ unit or a
SEZ developer can be made in the same manner as supplies
made for export:
• either on payment of IGST under claim of refund;
• or under bond or LUT without payment of any IGST

The concept of merchant or manufacturer exporter
would become irrelevant under the GST regime. The
procedure in respect of the supplies made for export is same
for both merchant exporter and a manufacturer exporter.

Yes. As LUT received are given for a period ending upto financial year. Hence Registered person need to apply for renewal of LUT.

In the case of supply by an unregistered person (including unregistered job workers), the registered person i.e., the exporter shall be liable to pay GST under reverse charge mechanism. However, the exporter can avail ITC of such GST paid and either utilize the ITC or claim a refund of the same.

He has to pay the IGST along with the interest @ 18% per annum for the period From date of issue of export invoice upto date of Payment of IGST

Exports of goods means taking goods out of India to a place outside India. (Section 2(5) of
IGST Act.)

Supply of service to a person located outside India where place of supply of service is in India. For example – a property rented out in Mumbai to a person residing in Dubai; agent located in India providing service to a New York based exporter for selling goods to China.

Supply of services where consideration is received in Indian currency or a currency other than convertible currency. For example supply of consultancy service by an Indian consulting firm to an overseas entity, payment for which is made in Indian rupees by Indian branch of overseas entity.

Services provided to overseas branch would not be eligible as export of services due to specific exclusion for such transactions in the definition of “export of service”.   This could entail reversal of input credits as such supply would be treated as non-taxable and not as zero rated.

Deemed exports refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received in para 7.02 of Foreign Trade Policy 2015-2020 shall be regarded as ‘deemed exports’, provided that goods are manufactured in India.