Export Against LUT Without Payment of GST or Bond

The government announced vide Notification No. 37 /2017 – Central Tax that exporters and now export against LUT without the payment of GST or Bond.

Note: LUT stands for Letter of Undertaking.

Since the implementation of GST, the exporters were facing many problems in taking refunds of GST paid on their consignment and blockage of working capital.

Requests were made to the government to ease these problems.

Under the earlier law, it was mandatory to issue a bond or LUT for persons willing to export without paying IGST.

Previously, the Eligibility for furnishing LUT was for those who have received a minimum of 10% inward remittances of foreign currency of the export turnover.

Additionally, it should not be less than 1 crore rupees in the preceding financial year.

Thus, very small number of big exporters qualified for providing the LUT.

Notification for Export Against LUT Without Payment of GST or Bond

This notification was issued on 4th October 2017, vide Notification No. 37 /2017 – Central Tax.

Download the notification from the link below:

Notification No. 37 /2017 – Central Tax

Key Points of Notification No. 37 /2017 – Central Tax – Export Against LUT only without payment of GST or Bond

1. Export Against LUT Only

In lieu of the notification mentioned above, All registered persons who intend to supply goods or services for export without payment of integrated tax shall be eligible to furnish a Letter of Undertaking in place of a bond except those who have been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or the Integrated Goods and Services Tax Act, 2017 (13 of 2017) or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees.

2. Issuance of LUT

The Letter of Undertaking shall be furnished on the letterhead of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 referred to in sub-rule (1) of rule 96A of the Central Goods and Services Tax Rules, 2017 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor.

3. Payments of Dues

If the registered person fails to pay the tax due along with interest, as specified under sub-rule (1) of rule 96A of Central Goods and Services Tax Rules, 2017, within the period mentioned in clause (a) or clause (b) of the said sub-rule, the facility of export without payment of integrated tax will be deemed to have been withdrawn and if the amount mentioned in the said sub-rule is paid, the facility of export without payment of integrated tax shall be restored.

4. Supply to and from SEZ Units

The provisions of this notification shall mutatis mutandis apply in respect of the zero-rated supply of goods or services or both made by a registered person (including a Special Economic Zone developer or Special Economic Zone unit) to a Special Economic Zone developer or Special Economic Zone unit without payment of integrated tax.

You can download GST templates like GST TRAN-1, GST Input Output Tax Report, and GST Export Invoice from here.

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