Under GST, there are two options being provided to exporters of goods or services or both for effecting such supplies :
- Submit a LUT or Bond (as applicable) to the Commissioner of GST. In this case, there is no need to pay tax on exports and the assessee can claim a refund of GST paid on its inward supplies.
Pay IGST on exports and then after claim refund for the same.
Letter of Undertaking (LUT):
All registered taxpayers who export the goods or services will now have to furnish a Letter of Undertaking (LUT) in GST form on the common portal of GSTN in order to make exports without payment of IGST. Letter of the undertaking has to be filed /submitted online before exporting the goods/services.
Hence, If you are engaged in the Import Export business, then it would always be a great option to file an LUT for getting exemption from paying GST.
Benefits of filing LUT:
- Once you submit the LUT, it is valid for one whole year.
- There would be no additional compliance.
- IGST will not have to be paid on exports for a year.
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