LUT stands for Letter of Undertaking (LUT). Letter of Undertaking is commonly known as LUT. If LUT has not been furnished, the export can only be made through payment of IGST or by furnishing an export bond. Initially, only the option of export bond was allowed.
The Letter of Undertaking (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.
When an Exports want to export without the payment of tax then LUT need to apply.
Validity of LUT
LUT is generally valid for a complete financial year in which it is given. However, if the goods or properties are not exported within time and if individual fails to make payment mentioned in the sub-rule 96A of CGST Rules then, the facilities provided to the exporter under LUT will be taken away till it is paid back. During the period where LUT’s facility is withdrawn, the exports will be done either on payment applicable on integrated tax or under bank with bank guarantee.
When to file form RFD-01 / RFD-01A - Refund
The excess of unutilized ITC can be claimed by way of filing Form GST RFD-01/ GST RFD-01A. A simple form is to be filled and filed accordingly with the department for claiming such refunds or any amount paid by mistake or the excess of amount lying in cash ledger.