The Goods and Services Tax Network (GSTN) has enabled the functionality to furnish Letter of Undertaking (LUT) for Financial Year 2021-2022 on the GST Portal.
Letter of Undertaking (LUT) is a document that suppliers of zero rates supplies can file to make such supplies of goods or services without having to pay taxes.
Under the new GST regime, all exports or supplies to SEZ are subject to IGST, which can later be reclaimed via a refund against the tax paid. However a supplier also has the option to file a letter of undertaking and make such supplies without payment of tax as per Section 16(3)(a) of the IGST Act, 2017. Further such supplier can also avail refund of input tax credit.
Under CGST Rules, 2017, any registered person who has not been prosecuted for tax evasion for an amount of Rs 2.5 Crore or above under the CGST Act/IGST Act/Existing law can furnish LUT if they:
- Intend to supply goods or services to India or overseas or to SEZs i.e. zero rated supplies
- Wish to make such supply without the payment of integrated tax
All registered taxpayers who have a zero-rated supply of goods or services and want to make such supplies without payment of integrated tax have to furnish LUT in Form GST RFD-11 on the GST Portal before affecting such supply.
It is important to notee here that LUT will be valid for a financial year. If LUT was furnished in FY 2020-21, then the date of expiry of the validity of such LUT is 31st March 2021. Therefore, exporters / suppliers to SEZ need to furnish fresh LUT for FY 2021-22 by 31st March, 2021 and they can now do so as the feature to furnish such LUT has been enabled.
The functionality for filing of LUT can be accessed at: Dashboard > Services > User Services > Furnish Letter of Undertaking> Select FY & apply
Also Read: ITC Restriction under Rule 86B : 10 facts you should know
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