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What is Letter of Undertaking (LUT) ?

A Letter of Undertaking is an undertaking by authorized persons of an entity that they will not pay tax on their export sales and will always abide by GST laws at all times. In case of any default, all the undertakers will jointly or severally be liable for any penalty or other consequences.

Under GST, there are two options being provided to exporters of goods or services or both for effecting such supplies :-

  • Pay IGST on exports and then after claim refund for the same; or
  • Submit an LUT or Bond (as applicable) to Commissioner of GST. In this case, there is no need to pay tax on exports and assessee can claim refund of GST paid on its inward supplies.

Before 04 October 2017, only those persons were eligible for Letter of Undertaking who fulfilled both of following conditions:

  1. A person who has not been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws for any amount of tax evasion. and
  2. A person should fall under one of following situations :
    • a status holder as specified in paragraph 5 of the Foreign Trade Policy 2015-2020; or
    • who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover,  which should not be less than one crore rupees, in the preceding financial year.
However, w.e.f. 04 October 2017, government has open LUT route for all exporters without considering any turnover limit. CBEC has issued Notification CGST-37/2017 to allow all exporters to export their goods or services or both without payment of IGST by submitting LUT to department.

Submission of LUT online

GSTN has enabled the service of submission of LUT in GST RFD-11 through online mode. User has to login to his account at GST portal and choose ‘File Letter of Undertaking (LUT)’ under ‘USER Services’.

After submission of LUT through online portal, there in no requirement to file physical documents of such LUT with GST department. Once ARN generated after submission of LUT online, it will be deemed as accepted.

On 6th April 2018, CBIC has issued a Circular- CIR-40/14/2018-GST to provide clarity on this matter. Followings are key notes of this Circular :-

Form for LUT: The registered person (exporters) shall fill and submit FORM GST RFD-11 on the common portal. An LUT shall be deemed to be accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online.

Documents for LUT: No document needs to be physically submitted to the jurisdictional office for acceptance of LUT.

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 an LUT in place of 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.

Documents required for submission of LUT thru Online mode:-

Basically, there is no requirement of any documents to upload with online application. However, to complete the application, following documents/ information must be available :-

  1. Detail of witnesses along with their identity and address proofs
  2. Consent letter of witnesses for such LUT
  3. Acceptance letter from department acknowledging LUT of any previous year
  4. Although, there is no document required to submit manually to department, it is advisable to create a proper file with all documents as required in manual mode of submission of LUT.

Documents required for LUT (Manual)

Application for Letter of Undertaking (LUT) to be submitted in duplicate. Such application should have following documents:

  1. Cover Letter requesting acceptance of LUT: A cover letter addressing to Assistant/Deputy Commissioner of GST of respective division required on the top of application.

  2. A copy of GST Registration Certificate

  3. Form GST-RFD-11- Original Two Set

  4. Original Two Sets of Annexure of Letter of Undertaking (LUT) on Letter Head of entity. Signatures of all undertaker (s) should be verified by Bank Manager. It also require two witnesses.

  5. Such annexure of LUT should be notarized.

  6. Attach personal IDs of both witnesses. Ensure that name and address on personal IDs must match with the detail mentioned in LUT.

  7. Attach personal IDs and PAN of all undertakers.

  8. Attach Incorporation documents of entity. (e.g. Partnership deed for Partnership firm, Certificate of Incorporation for Company/LLP, etc.)

  9. PAN of Entity

  10. Copy of Board Resolution/Authorization Letter authorizing director/ partner to file application.

  11. Self-Declaration on letter head for eligibility of LUT that :
    • Entity has not been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws for any amount of tax evasion.
    • It’s eligible for LUT in terms of export sales and corresponding collections during the previous year. (This is not required after 04.10.2017 wherein turnover requirements waived off for exporters)

  12. Prepare a summary of invoices raised against export sales and get it certified from Chartered Accountant. Attach all invoices of export sales  (This is not required after 04.10.2017 wherein turnover requirements waived off for exporters)

  13. Prepare a summary of collections against export sales during the year and get it certified from Chartered Accountant. Attach all evidences for such collections (e-brc or bank statement).  (This is not required after 04.10.2017 wherein turnover requirements waived off for exporters)

  14. Copy of IEC code, if available.

Word Formatted files :

Related article: What is Letter of Undertaking (LUT) under GST? What are eligibility conditions for this?

Comments

  1. Hello sir thank you for valuable article. Sir want some more help from u. The form no 11 should be on letter head?.
    What would be the wording of Cover Letter requesting acceptance of LUT, can you please provide me the formate. Another thing what is the matter described in point no 4 provide me detail about this

    1. It is not mandatory to print Form 11 on Letter Head.

      You can find format of Cover Letter at following link:
      https://ca-sunilkumar.com/wp-content/uploads/2017/04/Cover-Letter-LUT-Word-File.docx

      At point no. 4, I am discussing about Letter of Undertaking. you can find the word file at https://ca-sunilkumar.com/wp-content/uploads/2017/04/LUT-Format-Word-file.docx. In some offices of GST, they ask for verification of signatures from Bank Manager, however some office does not require this at all. So, it is advised to ask your jurisdictional officer about the exact requirement of this.

  2. Dear Sir

    Could you pls kindly share the format for – Self-Declaration on letter head for eligibility of LUT?

    Regards

  3. Thank you so much sir. May i know how man days will it take to get the LUT.

    Kindly let me know please.

  4. Sir is it necessary to get verified signatures of all undertakers from bank manager as mentioned in point 4 ?????

  5. Sir i am having one more question that is it necessary to submit bank guarantee along with LTU.
    if Yes then how we can determine the amount of bank Guarantee ??

  6. sir,
    our company supplying cartons to sez units. what are the required documents to file lut.

  7. To get LUT, RCMC registartion with FIEO or Capexil or other is must ?

    Can we get LUT without RCMC registration ?

    1. There is no requirement for any such registration to file LUT. Please refer CGST Notification 37/2017 dtd 04.10.2017

  8. Really helpful. Thanks
    But can you tell me the reference of the list of relevant documents from Rules/Circular.

    1. Please Read Rule 96A of CGST Rules 2017 along with CGST Notfn 37/2017 and GST Circular no. 8/2017 dtd 04.10.2017. You can find these files in ‘GST Downloads’ section.

        1. This is not required after 04.10.2017 because turnover requirements waived off for exporters from 04.10.2017 onwards

  9. Dear Sir,
    I have the following queries in regards to online filling of LUT:
    1. If we hadn’t filed offline LUT form before, then, whether we are eligible to file LUT online?
    2. Can the independent witness be directors of the company? If no, then who can be the independent witness?

    1. 1. You are eligible to file LUT online even if not filed earlier. Till date, No restriction to this.
      2. It’s better if witness are unrelated persons. Other employees of company can be witness subject to their prior confirmation for the same.

    1. It is not required now. (Earlier before 04.10.2017, it was required to satisfy monetary limit of export sales)..

  10. Hello Sir.
    I want to apply for LUT for export of Goods or Services without payment of Tax. Is it mandatory to submit hard copy (declaration in Rs.100.00 non-judicial stamp paper) along with covering letter.
    Or we can apply thru online without stamp paper.
    Also do we need to submit GST RFD11 document for the same.
    Thanks.

  11. Apply to Jurisdictional GST office to which BG was submitted for release of the same through a letter with copy of the notification by which this requirement was done away with.
    In some places, like Bengaluru, GST officers are saying that they are not authorised yet to approve LUT applied online for renewal. When hard copies are submitted, it is not being accepted in some offices. Still clarity is not there. Since provision is made for online submission for renewal ARN is generated, but approval & LUT Number is not available.

  12. What are the role of the Witness to take LUT Bond for Central good and Service tax?

    What are the implications for a Witness to a LUT Bond?

    I am asking, as a business colleague has requested my Aadhar Card copy for submission as a ‘witness to take LUT Bond for Central good and Service tax’ for his company.

    Kindly advise!

    1. In our view, witness is taken to prove genuineness of undertaker signing LUT, (to avoid any undertaking by a person who is not eligible to give such undertaking)

  13. Sir, for first time filing of LUT whether we have to upload all the required documents online ? or we have to just submit the RFD-11 online after filling the required details without any documents ? As we are applying first time.

    1. Just submit RFD-11. no requirement to upload any documents in this case.

      After online submission, If you receive notice for submission of hard copies of documents, then you have to submit it along with all attachments to the jurisdictional office.

  14. Thank you very much Sirji for sharing clarity and valuable information with regards to LUT required under GST Act !!!

  15. Dear Sir,

    As per Circular No. 40/14/2018-GST no need to file the Hard copy of LUT application. Pls clarify. weather we can file online or we need to submit documents offline.

    thanks,

    Mahesha CS

    1. In this circular, it is also being clarified that “The registered person (exporters) shall fill and submit FORM GST RFD-11 on the common portal. An LUT shall be deemed to be accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online”.

      So, you should submit LUT thru online mode. After submission, download LUT and copy of ARN for future reference.

    1. ARN number is sufficient until you received LUT number from department. Both are different, however, as a temporary measure, ARN is sufficient.

  16. Hi sir,
    we got ARN after submission of Form RFD 11 in GST portal, is we required submit any documents to department.

  17. do we have to charge IGST in the invoice, if we are dispatching material with LUT? What documents are to be prepared at the time of dispatch of material ?

    1. GST is not required to charge in the invoice…. From the point of view of GST, “invoice, e-way bill, GST certificate, copy of LUT” are required.

  18. Hi, regards the points I mentioned below if today I want to file LUT do I need to furnish these documents. If yes there are any conditions and please give some details about the documents

    It’s eligible for LUT in terms of export sales and corresponding collections during the previous year. (This is not required after 04.10.2017 wherein turnover requirements waived off for exporters)
    Prepare a summary of invoices raised against export sales and get it certified by Chartered Accountant. Attach all invoices of export sales (This is not required after 04.10.2017 wherein turnover requirements waived off for exporters)
    Prepare a summary of collections against export sales during the year and get it certified by Chartered Accountant. Attach all evidence for such collections (e-brc or bank statement). (This is not required after 04.10.2017 wherein turnover requirements waived off for exporters)

    1. Now, there is no document required to attach on GST portal for furnishing of LUT through online mode. Further the requirements referred by you (viz. turnover limit, certification, export invoces, e-brc, bank statement, etc.) are not applicable as on date.

  19. my status is still Submitted still didn’t get approval and any LUT number. How many days it will take to get LUT to approved. Please guide on this matter. Almost 1 month Complete to apply Lut.

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