GST LUT Registration

GST LUT, or Letter of Undertaking, is a valuable tool for exporters in India. It's a document that allows exporters to conduct their business more efficiently by enabling them to export goods or services without the immediate payment of the Integrated Goods and Services Tax (IGST). Instead, by submitting an LUT, exporters make a commitment to follow GST rules for their exports. This means they can save on upfront tax costs, making international trade more streamlined and cost-effective. GST LUT simplifies the export process and empowers businesses to compete more effectively in the global market, promoting ease of doing business and facilitating international trade.

Who Qualifies for a Letter of Undertaking (LUT)?

The Letter of Undertaking (LUT) is accessible to all registered taxpayers engaged in exporting goods and services. However, it's essential to note that individuals who have faced legal action for tax evasion exceeding Rs. 250 lakh or more are ineligible for LUTs. These LUTs have a one-year validity, requiring exporters to renew them for each fiscal year. Should the conditions stipulated in the LUT not be met within the specified timeframe, the privilege will be revoked, and exporters will be compelled to furnish bonds. For assesses who export without paying Integrated Goods and Services Tax (IGST), bonds and LUTs are applicable in various scenarios:

• For zero-rated supplies without IGST payments to Special Economic Zones (SEZ).
• When exporting products to a foreign nation without paying IGST.
• When delivering services to a client in a foreign country without IGST payments.
• In these situations, LUTs and bonds serve as valuable instruments to facilitate tax compliance and export operations while avoiding the immediate payment of IGST.