Letter of Undertaking for Goods and Services Tax

Apply For LUT ( Letter Of Undertaking )

It serves as a legally binding agreement between the sender and the recipient. This letter typically outlines the details of the undertaking, including timelines, budgets, and any other relevant terms.

What is Letter of Undertaking?

While exporting goods or services, the exporter has an option to either pay IGST on exports and then claim refund of GST paid amount, or furnish Letter of Undertaking (LUT) and sell without payment of GST

LUT is prescribed to be furnished in form GST RFD 11 under rule 96A, whereby the exporter declares that he/she would fulfill all the requirements prescribed under GST while exporting without making IGST payment.

Documents Required for Letter of Undertaking

Identification Proof
Address Proof
Agreement or Contract
Detailed Description
Signature
Previous LUT Copy (if have)
GST Login Credentials

Who Is Eligible Letter of Undertaking?

Businesses Engaged in International Trade
Contractors and Suppliers
Government Agencies and Public Institutions
Individuals Seeking Financial Assistance

Benefits of GST Return Filing

Facilitates Trade Transactions

Enhances Credibility

Cost-effective Financing

Reduces Transaction Risks

See Exmaple :

	Export without IGST (under LUT)	Export under IGST (without LUT)
Sales Value	100 (no GST)	100 + IGST = 118
Purchase Value	80 + 18% GST = 94.40	80 + 18% GST = 94.40
GST Paid to Govt.	Nil	18-14.40 = 3.60
	In this case, the exporter can apply for refund of GST paid on purchase which is accumulated as ITC (Rs.14.40), or use it against non-export sales GST set-off Lesser amount is stuck with the department for refund.	In this case, the exporter can apply for refund of GST paid on sales (Rs.18/-), there is no possibility of any set-off of this amount.

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