Last Date for Furnishing LUT - Export without Payment of Tax (Updated till 27.06.2020)
Export without payment of tax
For
considering the difficulties faced by the exporter in the process of refund and
efforts for taking refund
for the goods and services which have been exported, the government has
introduced the concept of "Letter
of Undertaking (LUT) or Bond".
Under the GST Scenario, exporter has two options:
- Export the goods and services by paying tax and later reclaim by apply refund for the tax paid or,
- Export the goods and service without paying tax by issuing Letter of undertaking or Bond
Under
this article, we are explaining the two ways for exporting the goods and services without payment f tax:
1. LUT ( Letter of Undertaking)
2. Bond
1. LUT (letter of undertaking)
A letter of Undertaking (LUT) is a document that exporters can file to export goods and services without having to pay taxes. Below are the benefits and conditions required for filing the LUT.
Levy of Interest in case of LUT:
If the goods and services against which
LUT has been furnished is not exported, the followings consequences have to born by the
taxpayer:
- If the goods are not exported within 3 months from the date of issue of export invoice, exporter is liable to pay GST along with interest at the rate of 18% p.a. within 15 days from the end of such 3 month period.
- Also, in case of the payment for the services are not received within 1 year against which LUT has been submitted, the exporter is liable to pay GST @ 18% p.a. within 15 days from the end of such 1 year period.
Due date for filing LUT for the FY 2020-21
Earlier:
As
per clarification issued by the government and vide Notification No 35/2020 Central Tax
dated 03.04.2020, the requirement of furnishing of any report, documents,
return,statements
which falls between the period from 20.03.2020 to 29.06.2020 has been extended
till 30.06.2020.
Amendment:
Vide Notification 55/2020-Central Tax dated 27.06.2020 the government has amend the Notification no. 35/2020-Central Tax which states that requirement of furnishing of any report, documents, return,statements which falls between the period from 20.03.2020 to 30.08.2020 has been extended till 31.08.2020.
Steps to file LUT
1. Login to GST portal click on "Services" tab and under that select the "User Services". After that select the option "Furnish Letter of Undertaking (LUT)".
2. Select the Financial Year for which you want to file the LUT under the option "LUT applied for Financial Year". If the LUT for the previous year is furnished offline, then attach it by clicking "Choose File" as shown in screen below.
3. Then, the exporter has to give the undertaking by ticking the 3 boxes which says:
- Export of the goods will be done within three months from the date of issue of tax invoice or the time as may be extended time if allowed by the commissioner.
- The exporter need to abide by the GST law in respect of exports.
- To pay Integrated tax along with the Interest if failed to export. Also, the interest will be paid the rate of 18% p.a. for the period from the date of issue of export invoice up to the date of payment of Integrated tax.
4. After that mention the information of 2 independent witnesses for generating LUT. Fill all the basic details as depicted in the image below:
2. Bond:
Bond is required if the condition mentioned in the LUT is not satisfied, or the entity is not eligible to submit the LUT.
The following points needs to be considered for furnishing bond:
- Bond is required to be furnished manually i.e. no online facility is available for bond.
- Bond must be on non-judicial stamp paper and accompanied by bank guarantee( not exceeding 15% of the bond amount)
- The bond must cover the estimate tax liability for export of goods and services.
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