GST LUT OR EXPORT BOND FILING
DEFINITION
A Letter of Undertaking is known in common parlance as GST (LUT). A Letter of Undertaking (LUT) is prescribed to be presented in Form GST RFD 11 under rule 96A which states that hereby the exporter declares that he or she would fulfil all the requirements prescribed under GST when they export their goods/wares without making the IGST payment.
All the GST (LUT) 2022 registered goods and service exporters are eligible to submit the letter of undertaking(LUT) except those exporters who have been charged and prosecuted for tax evasion with an amount that is in excess of Rs.250 lakhs under the CGST Act/the Integrated Goods and Services Tax Act,2017/ or under any other pre-existing laws. In such a case where the exporter is not allowed to file for a letter of undertaking(LUT), they have to submit an export bond.
MEANING OF Letter of Undertaking (LUT) FOR EXPORTS
As per the Central Goods and Services Tax Rules, 2017 any registered individual who exports goods without the payment of integrated tax has to submit a bond or a Letter of Undertaking (LUT) in FORM GST RFD-11 except the exporters who have been charged for any tax evasion wherein the amount exceeds Rs.250 lakhs under the CGST Act or the Integrated Goods and Services Tax Act,2017 or any of the pre-existing laws.
A letter of Undertaking is valid for a period of one year from the date of submission. If an exporter fails to fulfil the conditions of the Letter of Undertaking, their privileges may be revoked and the exporter would be required to submit a bond. All exporters need to submit a letter of undertaking/export bond under the new format specified under GST before 31st July every year.
MEANING OF EXPORT BOND FOR GST
Exporters/export houses who are not eligible to furnish a Letter of Undertaking (LUT) as per the above mentioned conditions would have to submit an export bond along with a bank guarantee. This export bond should cover the amount of tax involved in the export basis the estimated tax amount as assessed by the exporter/export house himself/themselves. An export bond should be submitted on a non-judicial stamp paper of the value as applicable in the State where the bond is being submitted. An exporter can also submit something called a running bond. This means that an export bond need not be executed for each and every export transaction conducted by an exporter/export house. But, if the outstanding tax liability on the export is in excess of the bond amount at any given time, the exporter needs to submit a fresh bond to cover the additional liability that may be incurred. A bank guarantee can also be submitted along with an export bond. The value of the bank guarantee shouldn’t exceed 15% of the bond amount. Basis the track record of the exporter/export house, the bank guarantee required to be furnished with the export bond may be waived off by the Jurisdictional GST Commissioner.
THE NINE IMPORTANT ARTICLES FOR EXPORTERS
GST RFD-11
A GST RFD-11 must be filed by the individual/entity registered under the GST Portal.
GST LUT FORMAT
A sample LUT declaration format should/must be prepared in order to obtain a letter of undertaking(LUT) approval.
GST EXPORT BOND FORMAT
A sample export bond declaration format that should/must be prepared in order to obtain approval.
DEEMED EXPORTS
This is the process to claim input tax credit refund for deemed exports through the GST Portal. Deemed exports refers to the supply of goods which are manufactured in India but are not categorized as services.
EXPORT OF GOODS
This is the process to claim GST refund on exports through the GST Portal. As per the provisions under IGST law, the exports of goods are considered as zero-rated supply and are exempted from GST. Exporters/export houses are thereby eligible to claim the refund of GST paid on their exports.
EXPORT OF SERVICES
This is the process to claiming GST refund on exports of services through the GST portal. Export of services are considered as zero-rated supply, hence they are exempted from GST.
IMPORT EXPORT CODE
This is the process for the submission of the import export code(IE) code application along with the documents that are required to obtain an import export code(IE) code. Any business in India that imports or exports goods/or services is required to submit an import export code (IE) code application with the DGFT.
BASIC
Our team of GST experts at ACE ALLIANCE will help with the filing of GST LUT Forms for exporters