LUT Bond

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LUT Bond Registration

The LUT Bond is an acronym for the Letter of Undertaking which is a document filed by an exporter to get relief from payment of IGST on exports. The government has provided the option of filing LUT for exporters to do exports without payment of IGST in order to boost the exports. Most of the small traders face the problem of an extreme liquidity crunch so to solve this problem, the government has introduced the option of filing LUT Bond wherein they can now conduct exports on 0% IGST just by clearly specifying that their motive is export of goods.

Any registered taxpayer who is exporting goods or services is eligible to make use of L UTs. But, a person who has been prosecuted for tax evasion for an amount of Rs. 2.5 crores or above are not eligible under the act to furnish LUTs. Besides, the validity of such LUTs is for a period of one year (till the end of the financial year). Whereas, an exporter furnishing LUT’s are required to furnish fresh LUT for each financial year. If in case, the mentioned conditions in LUT are not satisfied within the time-limit, the privileges are revoked and the exporter will have to furnish bonds.

Legal Raasta will help you to lessen the burden of preparing Letter of Undertaking (LUT). Our expert’s team will provide you with the best advice and fill all your formalities on behalf of your company. So, hurry up and apply today for LUT Bond Online with us.

Documents required for LUT Bond

Given below are the documents required for the Letter of Undertaking:—

  • Cover letter requesting acceptance of LUT
  • One copy of GST registration Bond
  • Two sets of original Form GST-RFD-11
  • Two sets of original Annexure of LUT on the letterhead of the entity. Remember the signature of all undertakers should be verified by the Bank Manager. Two witnesses are also required.
  • This Annexure of LUT should be notarized.
  • The personal IDs of both the witnesses must be attached. The details mentioned in the LUT must be matched with the name and address on personal IDs.
  • Personal IDs and PAN Card of all undertakers.
  • ncorporation documents of an entity such as a Bond of incorporation for the company, Partnership deed for a partnership firm.
  • PAN Of entity
  • A copy of Authorization letter authorizing director/ board resolution/ partner to file an application.
  • Self-declaration on letterhead for the eligibility of LUT
  • Invoices summary raised against export sales and get it certified from Chartered Accountant. Then attach all invoices of export sales.
  • Collections summary against export sales during the year and get it certified from Chartered Accountant. Then attach all evidence for such collections.
  • A copy of the IEC Code, If any

Bank Guarantee

The export facility under Letter of Undertaking has been extended to all registered persons, a bond will be required to be furnished by those persons who have been prosecuted for cases involving an amount exceeding Rs. 250 lakhs. In all the cases, a bond shall be accompanied by a bank guarantee of 15% of the bond amount.

Procedure of LUT Bond

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Frequently Asked Questions

1. What is a LUT Bond?

The LUT is a document that enables a customer to raise funds as a bank guarantee. It is a kind of a bond issued by Central Government which an assessee undertakes in case of export. The Letter of Undertaking is prescribed to be furnished in form GST RFD 11 under rule 96A, whereby the exporter declares that he/she would fulfill all the requirements prescribed under GST while exporting without making IGST payment.

2. What is the Validity of LUT?

The validity of LUT is for a complete financial year in which it is given.

3.Who is required to file LUT?

According to the central government, all the listed taxpaying individuals who want to supply goods and services for export without paying IGST shall be required to file the LUT in place of a bond.

4. How to restore the LUT facility?

When the amount mentioned in the said sub-rule is paid subsequently, the facility of export under the LUT shall be restored. As an outcome, exports during the period from when the facility to export under LUT is withdrawn till the time the same is restored, shall be either on payment of the applicable integrated tax or under bond with the bank guarantee.

5.How to withdraw LUT facility?

If the goods are not exported within the time specified in sub-rule (1) of rule 96A of the CGST Rules and the registered person fails to pay the amount mentioned in the said sub-rule, then under LUT, the facility of export will be deemed to have been withdrawn.

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