The Letter of Undertaking (LUT) is a crucial document for exporters. It allows them to supply goods or services without paying integrated tax (IGST). By submitting Form GST RFD 11, exporters declare their commitment to fulfill all the requirements imposed by the government under the GST Act. The LUT serves as a guarantee that exporters will follow the rules related to exporting goods or services.
In the world of international trade, exporters face many challenges, including complying with government regulations and ensuring smooth transactions. One important document that exporters must know about is the Letter of Undertaking (LUT). In this guide, we will explain what LUT is, its applicability period, conditions to fulfill, and the absence of a turnover criterion.
Exporters should be aware of the applicability period of LUT. It is valid for one financial year, starting from the month of application. For example, if an exporter applies for LUT in August 2022, it will be valid until March 2023. Exporters must accurately select the financial year for which they want to file the LUT.
To benefit from the LUT, exporters must meet specific conditions:
One significant advantage of LUT is the absence of a turnover criterion for its filing. The government has extended this facility to all taxpayers, except those involved in tax evasion of 2.5 crores or more. This exemption allows genuine exporters to benefit from LUT without any threshold restrictions.
