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Online or offline? All about LUT

Online or offline? All about LUT

In order to make the export of goods or services, without payment of GST , a Letter of Undertaking (LUT) is required to be obtained under the provisions of Section 16 of IGST Act read with rule 96A of GST Rules, by every registered taxable person.

Central Board of Indirect Taxes and Customs (CBIC) (then “CBEC”) on July 7th, 2017 had issued a notification no. 16/2017-CT and 37/2017-CT, which had specified the conditions and safeguards for furnishing a LUT.

One of the conditions is that LUT is to file for one financial year only (which ends on March 31st every year). Also, a circular No. 8/8/2017-GST Dated the 4th October 2017 was issued by CBIC, as per para 2.b of which LUT is valid for the whole financial year in which it is furnished.

During last financial year (i.e. FY 2017-2018), many GST formations across India had issued LUTs for 1 complete year (i.e. for 12 months starting from the date of issuance) instead of the Financial year ending on March 31, 2018. So it is quite possible that your LUT is carrying the expiry date of a date later than March 31st, 2018.

It is advisable to furnish a new LUT for the financial year 2018-2019, to be in compliant with notification no. 16/2017 and 37/2017, irrespective of expiry date mentioned on LUT acceptance letter.

Online or offline?

In February 2018, GSTN portal had started facility of filing online LUT to remove physical interface between taxpayer and tax authorities. And finally, after a long wait, CBIC issued Circular No. 40/14/2018-GST dated 6th April 2018 and provided that –

A) Form for LUT: The registered person (exporters) shall fill and submit FORM GST RFD-11 on the common portal. A LUT shall be deemed to be accepted as soon as an acknowledgment for the same, bearing the Application Reference Number (ARN), is generated online. Which means days of the physical filing of LUT are over. You only need to file online LUT.

B) Documents for LUT: No document needs to be physically submitted to the jurisdictional office for acceptance of LUT. Earlier under the physical regime, lots of docs were required to be submitted to GST office. But my humble suggestion is to take a printout of online LUT, get it signed from your witnesses and retain the copy of identification proof of witnesses with you. Since online LUT does have any provision of signatures of witness and thus tomorrow, this shall serve as a sufficient proof that you had obtained witness on LUT.

C) Acceptance of LUT/bond: An LUT shall be deemed to have been accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online. If it is discovered that an exporter whose LUT has been so accepted, was ineligible to furnish a LUT in place of the bond as per Notification No. 37/2017-Central Tax, then the exporter’s LUT will be liable for rejection. In case of rejection, the LUT shall be deemed to have been rejected ab initio.

Proper care should be taken to ensure that you are eligible to file LUT. One the conditions is that you should not have been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or the Integrated Goods and Services Tax Act, 2017 (13 of 2017) or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees.

Happy filing!

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Profile photo of Deepak Bholusaria, CA Deepak Bholusaria, CA

Quitters do not win, winners do not quit.

Delhi, India

A seasoned professional, speaker and trainer with 19+ years of experience

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Opinions & information presented by ConsultEase Members are their own.