Zero Rated Exports under Letter of Undertaking (LUT) – Facility of Online filing for LUT
April 11, 2018
Members of the Council,
Sub : Zero Rated Exports under Letter of Undertaking (LUT) – Facility of Online filing for LUT
As you are aware, exporters have the option of Paying applicable Integrated GST (IGST) on export products (on which refund of IGST is applicable) or choose zero rated exports option (wherein products are exported without payment of GST by submitting Letter of Undertaking – LUT) and then claim refund of GST paid on inputs i.e. refund of GST Input Tax Credit. With regard to zero rated exports under LUT, please note the following.
a) CGST Circular No. 8/8/2017 dated Oct. 4, 2017 (copy enclosed) stated the following.
· 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;
· The LUT shall be valid for the whole financial year in which it is tendered.
b) The Central Board of Excise and Indirect Taxes (CBIC) has now issued a CGST Circular No. 40/14/2018 dated 6th April 2018 making the following amendments in aforesaid CGST Circular No. 8/8/2017 with regard to issue of LUT
|Earlier Provision for LUT notified vide CGST Circular No. 8/8/2017
|Amended provision notified vide CGST Circular No. 40/14/2018 dated 6th April 2018
|Form for bond/LUT: Till the time FORM GST RFD-11 is available on the common portal, the registered person (exporters) may download the FORM GST RFD-11 from the website of the Central Board of Excise and Customs (www.cbec.gov.in) and furnish the duly filled form to the jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business. The LUT shall be furnished on the letter head of the registered person, in duplicate, 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. The bond, wherever required, shall be furnished on nonjudicial stamp paper of the value as applicable in the State in which the bond is being furnished.
|Form for LUT: The registered person (exporters) shall fill and submit FORM GST RFD-11 on the common portal. An LUT shall be deemed to be accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online.
|Documents for LUT: Self-declaration to the effect that the conditions of LUT have been fulfilled shall be accepted unless there is specific information otherwise. That is, self-declaration by the exporter to the effect that he has not been prosecuted should suffice for the purposes of Notification No. 37/2017- Central Tax dated 4th October, 2017. Verification, if any, may be done on post-facto basis.
|Documents for LUT: No document needs to be physically submitted to the jurisdictional office for acceptance of LUT.
|Time for acceptance of LUT/Bond: As LUT/Bond is a priori requirement for export, including exports to a SEZ developer or a SEZ unit, the LUT/bond should be processed on top most priority. It is clarified that LUT/bond should be accepted within a period of three working days of its receipt along with the self-declaration as stated in para 2(d) above by the exporter. If the LUT / bond is not accepted within a period of three working days from the date of submission, it shall deemed to be accepted.
|Acceptance of LUT/bond: An LUT shall be deemed to have been accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online. If it is discovered that an exporter whose LUT has been so accepted, was ineligible to furnish an LUT in place of bond as per Notification No. 37/2017-Central Tax, then the exporter’s LUT will be liable for rejection. In case of rejection, the LUT shall be deemed to have been rejected ab initio.
From the above, it may be kindly noted that eligible exporters can apply for LUT online through FORM GST RFD-11 and an LUT shall be deemed to have been accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online.
Thanks and regards
R. Selvam IAS
COUNCIL FOR LEATHER EXPORTS