GST Letter of Undertaking (LUT) for financial year 2022-23

GST Letter of Undertaking (LUT) for financial year 2022-23

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GST Letter of Undertaking (LUT) for the financial year 2022-23

Any registered person who wishes to offer goods or services for export without paying IGST must provide a bond or a Letter of Undertaking (LUT) in Form GST RFD-11 before export, as per rule 96A of the CGST Rule-2017. The present article briefs the procedure to file a Letter of Undertaking (LUT)  in Form GST RFD-11.

Applicability of LUT

The LUT facility has been extended to all registered persons who intend to supply goods or services for export without paying integrated tax, except those who have been prosecuted for any offense under the CGST Act, the Integrated Goods, and Services Tax Act, 2017 or any other existing law, and the amount of tax evaded in such cases exceeds ₹250 lakh.

Union Budget 2021 –Changes in Letter of Undertaking

In the Union Budget 2021, the government suggested that refunds of GST paid on products and/or services exported (i.e. rebates) be limited to recognized taxpayers or commodities/services.

As a result of this change, many enterprises that previously claimed a tax rebate on export supplies would now have to resort to exports without paying tax under a Bond or Letter of Undertaking and then claim reimbursement of unutilized input credits.

GST Letter of Undertaking (LUT) for the financial year 2022-23

  • For exports on or after January 4, 2022, the revised LUT for FY 2022-23 should be accessible before that date.
  • The GSTN common portal now allows users to submit LUT for FY 2022-23.
  • The method for submitting/renewing a letter of undertaking is quite straightforward and user-friendly. It is valid from the date of filing to the following March 31st.

Procedure to File Letter of Undertaking (LUT)

Follow these steps to file a Letter of Undertaking (LUT) for the export of goods or services at the GST Portal:

  • Go to www.gst.gov.in to access the GST Portal. The GST Home page is now visible.

  • Select the Furnish Letter of Undertaking (LUT) command from the Services > User Services menu.

  • The GST RFD-11 form appears. The form is reproduced here for ready reference:
GST RFD-11
  • From the LUT Applied for Financial Year drop-down list, choose the financial year for which LUT is being used.

  • To upload the previous LUT, click the Choose File button.

  • On the Letter of Undertaking Form/ GST RFD-11 that displays on the screen, fill in the required information. On the form, you must complete the following:
  • Self-Declaration: Check each of the three boxes by clicking on them.
  • Exporter commits to the following as a result of this:
  • Export of goods/services must be completed within three months of the date of issue of the Export invoice, or within any additional time authorized by the Commissioner.
    To follow the GST rules when it comes to exporting.
    If you fail to export, you must pay IGST plus interest.

Note: Interest must be paid at a rate of 18 percent per year from the date of the export invoice until the date of IGST payment.

(b) Provide Information to Independent Witnesses: Indicate the names, occupations, and addresses of two independent witnesses in the boxes outlined in red.

It’s worth noting that the Witnesses listed in the Letter of Undertaking (LUT) are also listed on the running Bond/Bank guarantee.

  •  Select a file location > Click ‘SAVE’ > ‘PREVIEW’ to double-check the form’s accuracy before submitting it. It should be noted that it is presently not possible to revise a signed/submitted form.

Sign and File the Form

A letter of the undertaking can be signed by the primary authorized signatory or any additional authorized signatory. The working partner, the Managing Director, the Firm Secretary, or the proprietor, or a person properly authorized to execute the form by such working partner or the Board of Directors of such company or proprietor, might be the authorized signatory.Use one of the options below to sign and file the form:

Submit with DSC: Sign the application with the authorized signatory’s registered Digital Signature Certificate.
To take advantage of this feature, go to ‘SIGN AND FILE WITH DSC’ > ‘SIGN AND FILE WITH DSC’ > ‘SIGN AND FILE WITH DSC’ A message box with a warning appears. ‘PROCEED’>  A one-of-a-kind ARN is generated by the system (Application reference number)

OR

Submit with EVC: To use this option. The system will send an OTP to the authorized signatory’s registered mobile phone number and e-mail address. To sign the application, enter that OTP in the pop-up. A submission message box comes with a warning message. ‘PROCEED’> Companies and LLPs can only file through DSC since the system creates a unique ARN (Application reference number).

There is a message of confirmation. By email and SMS, the GST Portal transmits this ARN to the Taxpayer’s registered email and mobile phone.

The acknowledgment can be downloaded by clicking the DOWNLOAD button. You can also look at the Letters of Undertakings that were previously posted on the GST website.

Go to ‘SERVICES’ > ‘User Services’ on the home page. ‘View my LUTs I’ve Submitted’ > Choose a time frame > Check out the list of LUTs that were available during the period you choose > To see the details of a Letter of Undertaking, click the ‘VIEW’ button next to it.

Various statuses of the taxpayer’s LUT application

The following is a list of the statuses of the LUT application filed by the taxpayer in Form GST RFD-11 ARN:

  • Submitted: The status of a LUT application after it has been successfully submitted by the taxpayer.
  • Pending Clarification: The status of a LUT application after a notice of clarification is issued by the LUT Processing Officer.
  • Pending Order:The status of the LUT application after the taxpayer provides a response to the notice within 15 days. Alternatively, if the taxpayer does not respond to the notice after 15 working days, the GST Portal switches the status from pending for clarification to pending for order.
  • Approved:The status of the LUT application after the Tax Official acknowledges the taxpayer’s assurance.
  • Rejected: The status of the LUT application after the Tax Official rejects the taxpayer’s commitment.
  • Deemed Approved: Status of LUT application if no action is taken by the Tax Official within 3 working days.
  • Expired: At the end of each fiscal year, the status of the LUT application will be changed to Expired.

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