Notification No. 37/2017- Central Tax

 

In exercise of power conferred by section 54 of the Central Goods and Services Tax Act 2017 and section 20 of Integrated Goods and Services Tax Act 2017, The Central Board of Excise and Customs specifies certain conditions and safeguards for furnishing a Letter of Undertaking(LUT) in place of Bond by a registered person who is intending to supply goods or services for export without payment of Integrated tax.

 

 

Who is eligible to furnish LUT?

All registered persons who intend to supply goods or services for export without payment of integrated tax (IGST) shall be eligible to furnish a Letter of Undertaking in place of a bond.

 

Who is not eligible to furnish LUT?

A registered person who has been prosecuted for any offence under Central Goods and Services Tax Act 2017 or the Integrated Goods and Services Tax Act 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.

 

Procedure to furnish LUT?

The Letter of Undertaking is required to be furnished on the letter head of the registered person in duplicate for a particular financial year in the annexure to FORM GST RFD-11

 

Who can execute the LUT?

The Letter of Undertaking shall be executed by the working partner of a partnership firm, a Managing Director or a Company Secretary of a Company, the proprietor in case of proprietorship or any other person duly authorized by such working partner or Board of Directors of such company or proprietor.

 

Does LUT has an expiration date?

Yes, The LUT is valid for the whole financial year in which it is tendered. However, if the goods are not exported within the time specified in sub-rule (1) or Rule 96A of CGST Rules and registered person fails to pay the amount mentioned in the said sub rule, the facility of export under LUT will be deemed to have been withdrawn. If the amount subsequently paid, the facility of export under LUT shall be restored.

 

What is the specified time to pay tax?

Once the FORM GST RFD-11 is submitted to jurisdictional commissioner, register person is bind to pay the tax due along with interest specified under sub-section (1) of section 50 of the Act within a period of

  1. Fifteen days after the expiry of three months from the date of issue of invoice for export, if the goods are not exported out of India; or
  2. Fifteen days after the expiry of one year, or such further period as may be allowed by the commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.

 

The provisions of this notification shall mutatis mutandis apply in respect of zero-rated supply of goods or services or both made by a registered person (including 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.

 

Download the Letter of Undertaking here, Click below

Letter of Undertaking Format for GST