Process of LUT renewal under GST
Exporters of goods and services from India can export with zero-rated tax supplies under the GST law. This is possible only when the exporter has a valid Letter of Undertaking (LUT). Almost all government registrations for exporters in India are subject to renewal. Similarly, the LUT furnished on the GST portal is also subject to renewal at the end of each financial year. Carrying on an export business in India, is not an easy task, especially with all the mandatory yearly registrations. So, the government of India actively takes measures to promote exports from India. As a result of which, zero-rated supplies are allowed to all exporters holding valid LUTs or bonds. This article gives a brief guide on the process of LUT renewal under GST, and why it is important to maintain and renew LUT yearly.
Process of LUT Renewal
Since 2018-19, the entire process of furnishing LUT on the GST portal, and submitting documents to the GST department have been conducted online. This is the result of the active efforts of the GOI to create accessibility and make India digital. Today, all exporters of goods and services can apply and renew LUT online by following the simple process as given below:
- Visit the GST Portal and login to your Account;
- Go to Services > User Services > Furnish LUT;
- Select the Financial Year for which you want to apply the LUT from the drop-down list;
- Submit the previous letter of Undertaking in PDF or JPEG format;
- Verify/self-declare statements by clicking on the checkboxes;
- Provide contact details for two witnesses;
- Get sign of Authorised Signatory;
- Preview the application, for clerical errors;
- Verify and submit by either DSC or EVC.
As soon as you submit the LUT on the GST portal, the GST portal will generate a receipt of acknowledgment with the ARN (Application Reference Number). This ARN is also the approval of LUT renewal.
If you are new to the export business and are looking to apply for your LUT under GST for the first time, check this blog out on “How to file letter of undertaking (LUT) under GST?”
Documents required for LUT renewal in India
Now that we know the entire process of how you can renew your LUT, you also need to know the additional documents that are supposed to be submitted on the GST portal. The list of documents required for LUT renewal is as follows:
- Cover letter for Renewal of LUT;
- GST Certificate of the exporter entity;
- Copy of the previous letter of undertaking furnished;
- Form GST RFD 11; and
- Lastly, copy the declaration of no dues/prosecution.
Need for LUT Renewal
As a result of the inception of the GST, Letter of Undertaking, and Export bonds allow zero tax-rated supplies under the GST. However, as per the circular no. 8/8/2017 of GST “LUT remains valid for the whole Financial year in which it is applied.”
For example, if ‘Raj‘ an exporter of machinery, furnishes his LUT for FY 2021-22, it will remain valid till 31st March 2022. If he wants to carry on exports without having to pay IGST after 31st March 2022 – he will have to apply for the LUT renewal online.
Approval for Renewal of LUT
Once you apply for the LUT renewal by following the steps given above, you don’t have to wait for two or three days. It is an instant process, and your renewal is complete as soon as the portal generates the ARN in acknowledgment receipt.
Furnishing LUT is not mandatory for all exporters in India. However, the sole purpose behind the introduction of a Letter of Undertaking on GST was to make the process of exporting goods and services easier. Hence, it is very important to furnish the letter of undertaking. Connect with LegalWiz.in exports today and file LUT Renewal in just a few clicks!
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As a writer, Diksha aims to make complex legal subjects easier to comprehend for all. As a Lawyer, she assists startups with their legal and IPR drafting requirements. To understand and further spread awareness about the startup ecosystem is her motto.
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