Letter of Undertaking in GST with Format

Meaning: The Letter of undertaking under GST is an agreement between the applicant of the letter of undertaking and the government of India. Thus, it is a joint agreement wherein the government allows a supplier to export goods or services without payment of integrated tax(IGST). This is also called LUT in GST. Also, you may download the letter of undertaking format in pdf from the below section.

image for letter of undertaking(LUT) in gst

Further, the supplier/applicant agrees to pay the integrated tax with 18% interest to the government, in case he fails to export the goods or services within a given time. Similarly, the tax with interest is to be payable from the date of invoice till the date of actual payment.  Therefore, the Letter of the undertaking is a type of guarantee to the government.

Letter of undertaking Concept

In India, the exports are duty-free with conditions.  Therefore, one has to provide a form called a Letter of undertaking a guarantee to secure government revenue.

Further, the GST Registered person can use a Letter of undertaking for export without payment of tax.  Also, he can use a Letter of undertaking for SEZ supplies.

Purpose of LUT

  • Zero-rated supply to SEZ unit without payment of IGST.
  • Export of goods to a country outside India without payment of IGST.
  • To provide services to a client in a country outside India without payment of IGST.

Letter of undertaking validity

The letter of undertaking is only valid till the end of the financial year i.e 31st March.  Therefore, you need to apply again for LUT for the next financial year.

You may download a Letter of undertaking format for offline use by clicking here.  Thus, the GST-registered person can now apply for an online Letter of undertaking by visiting GST Portal > services > user services > Furnish Letter of Undertaking (LUT) option.

Letter of Undertaking Format

The applicant for the letter of undertaking shall submit the application online mode on the GST portal. Therefore, one can not submit the hard copy by filling it in offline mode. However, you can download the letter of undertaking format in pdf by clicking on the below download button. Kindly note that the below letter of undertaking format is for reference only. Similarly, here is the sample of the letter of undertaking, which you will able to see once you are ready to submit it online.

image for letter of undertaking format with sample

How to apply LUT in GST online?

To file the LUT for the export of goods or services at the GST Portal, perform the following steps:

image for how to apply LUT in gst online
Letter for Undertaking online sample
  1. Access the GST Portal at www.gst.gov.in URL.
  2. Login to the GST Portal with valid credentials.
  3. Click the Services > User Services > Furnish Letter of Undertaking (LUT).
  4. You will the Form GST RFD-11on the screen. Select the financial year for which LUT is applied from the LUT Applied for Financial Year drop-down list.
  5. Click the Choose File button to upload the previous LUT.
  6. Select the declaration checkboxes.
  7. Enter the name and address of 2 witnesses in the Name, Address, and occupation of the independent and reliable witnesses section.
  8. Fill in the Name of Primary/ Other Authorized Signatory drop-down list, and select the name of the authorized signatory.
  9. In the Place field, enter the place where the form is filed.
  10. In case you want to save the form and retrieve form later, click the SAVE button to save the form.
  11. Click the PREVIEW button to preview the form.
  12. Tick mark the SIGN AND FILE WITH DSC or SIGN AND FILE WITH EVC button.
  13. Click the PROCEED button.
  14. The system generates an ARN and displays a confirmation message of successful submission.   Thereafter you can download the acknowledgment.

Application Status of LUT in GST

image for lut in gst status

Here is the list of the various status of your LUT applications. You can make out what’s wrong with your application by looking at the below description.

1. Submitted: The Status of the Letter of undertaking application after the Taxpayer submits the application successfully.

2. Pending for Clarification: Status of LUT application after the LUT Processing officer issues a notice for seeking additional clarification.

3. Pending for Order: This is the Status of the LUT application after the Taxpayer submits the written reply for notice within 15 working days. Similarly, this is applicable if the Taxpayer does not submit the reply for notice after the completion of 15 working days. Thereafter, the GST Portal changes the status from pending for clarification to pending for order.

4. Approved: This Status means the Tax Official accepts the LUT application after the undertaking furnished by the Taxpayer.

5. Rejected: The reject Status of the LUT application comes after the Tax Official rejects the undertaking furnished by Taxpayer.

6. Deemed Approved: The deemed approved Status of the LUT application comes in case the Tax Official doesn’t take any action within 3 working days.

7. Expired: The status shows that the LUT application will get the change to Expired automatically at the end of the respective Financial year.

Note: You may see only the submitted status on the GST portal after submitting the LUT application. You can make the exports without making payment of GST on the basis of this application without waiting for the approved status. However, if you want to be 100% sure whether the application is pending or approved, you may visit your GST jurisdiction office and check the status.

How to View Submitted LUT Applications?

  1. Open the GST Portal at www.gst.gov.in URL in your browser.
  2. Login to the GST Portal with your credentials.
  3. Click on the Services > User Services > View My Submitted LUTs
  4. Select the date range for the From and To period using the calendar
  5. Click the SEARCH button.

Now you can click on the DOWNLOAD button to download the Letter of undertaking in a pdf file.

Export Without Payment of Tax with LUT

CBEC issued a circular on 06th April 2018 to clarify exports without payment of tax under GST. This Circular has reference number 40/14/2018-GST dt. 06.04.2018.

Export of goods or services can be made without payment of integrated tax (IGST) under the provisions of rule 96A of the Central Goods and Services Tax Rules, 2017 (the CGST Rules). Similarly, under the said provisions, The registered person (exporters) shall fill and submit FORM GST RFD – 11 on the common portal.  Thus, a LUT(Letter of undertaking) shall be deemed to be accepted as soon as an acknowledgment for the same, bearing the Application Reference Number (ARN), is generated online.

Documents for LUT :

The applicant need not have to submit any document physically to the jurisdictional office for acceptance of LUT.

Acceptance of LUT/ bond:

A LUT shall be deemed to have been accepted as soon as:

You receive an acknowledgment for the same, bearing the Application Reference Number (ARN). However, If it discovers that an exporter whose LUT has been so accepted, was ineligible to furnish a LUT in place of a 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(from the beginning):

Further, as per notification 37/2017 dtd.04.10.2017, all registered persons who want to export without payment of integrated tax are eligible to furnish a Letter of  Undertaking in place of a bond. However, this is not applicable to those who have been prosecuted for any offense 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.

A detailed procedure for filing of LUT has already been specified vide Circular No. 8/8/2017 –GST dated 4th October 2017.

Deemed Approved LUT

In case the tax office does not process the LUT application within 3 workings then the application is to be treated as deemed approved. Similarly, the status will be changed from pending to Deemed approved.

Further, the GST portal will automatically generate the order copy and will be available to the taxpayer for downloading. Thus, the taxpayer can download a copy of the order from Dashboard > Services > User Services > View Additional Notices/Orders option.

Questions and Answers

What is LUT in GST?

The LUT stands for Letter of undertaking.

What is the purpose of a letter of undertaking?

One can apply for a Letter of undertaking to export Goods or services or both without payment of Tax.

What if I already have a manual approved Letter of undertaking?

If you have any Letter of Undertaking(LUT) which was furnished manually and got approved by the Tax Authority for the current Financial Year, then you can upload that LUT and file this online application for furnishing LUT to seek the online approval for that previous LUT.

Who can file a Letter of Undertaking?

Any GST-registered person wants to avail of the option to supply goods or services for export/SEZ units without payment of Integrated tax.

What is the form of LUT in GST?

The registered taxpayers shall use form GST RFD-11 to apply online on the GST Portal.