Apply For LUT ( Letter Of Undertaking )
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Procedure For Letter of Undertaking Through Marx Man Solution
Letter of Undertaking
While exporting goods or services, the exporter has an option to either pay IGST on exports and then claim refund of GST paid amount, or furnish Letter of Undertaking (LUT) and sell without payment of GST
LUT 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.
Example :
Export without IGST (under LUT) | Export under IGST (without LUT) | |
|---|---|---|
Sales Value | 100 (no GST) | 100 + IGST = 118 |
Purchase Value | 80 + 18% GST = 94.40 | 80 + 18% GST = 94.40 |
GST Paid to Govt. | Nil | 18-14.40 = 3.60 |
In this case, the exporter can apply for refund of GST paid on purchase which is accumulated as ITC (Rs.14.40), or use it against non-export sales GST set-off
Lesser amount is stuck with the department for refund. | In this case, the exporter can apply for refund of GST paid on sales (Rs.18/-), there is no possibility of any set-off of this amount. |
