Letter of Undertaking

A Letter of Undertaking (LoU) is a document issued by a bank to allow its customers to engage in international trade without the need for upfront payment. Essentially, it is a guarantee provided by the bank to the beneficiary of the LoU, assuring that the customer will fulfill the obligations of the trade transaction.An LoU is generally issued for import transactions and can be used as a substitute for a bank guarantee or collateral. It enables the importer to obtain goods from a foreign supplier without having to pay upfront for the transaction.

6000+

Happy Clients

14+

Years Experience

Free Consultation by Expert

Name

Mobile

State

6000+

Happy Clients

14+

Years Experience

Overview of Letter of Undertaking

The exporter certifies in the Letter of Undertaking (LUT), which must be submitted in Form GST RFD 11 in accordance with Rule 96A, that they will comply with all GST-related regulations when exporting without paying IGST. Any individual who has registered for GST is only eligible to submit a LUT if they have not already been charged with tax evasion that totaled more than Rs. 2.5 Crore, any other offence under the CGST Act, the IGST Act 2017, or any other applicable law. Exporter rights may be cancelled and a deposit is required if they do not meet the LUT standards. Please be aware that before exporting any goods or services, this Letter of Undertaking (LUT) must be submitted online. You can apply for Letter of Undertaking, or LUT if you meet the following conditions:

Wish to supply goods or services overseas or to India without paying GST
Registered business under GST
Do not have a tax evasion case of more than Rs 2.5 crore

Advantages of Letter of Undertaking

Exports without tax payment	An exporter can export products or services without paying taxes by filing a LUT under GST. To take advantage of zero-rated exports if LUT is not filed, the exporter must first pay the necessary tax while making exports and then file a refund claim
Saves Working Capital	Regular exporters greatly benefit from reporting LUT online as the refund process via an alternate channel is laborious. when a due refund is used to obstruct the large amount of capital
An Entire Financial Year Validity	Once submitted, the letter of undertaking is valid for the entire fiscal year for which it was submitted. So, unlike the reimbursement process, an exporter does not have to follow the formalities each time an export consignment is made
Simple and online process	Since April 2018, LUT submission and acceptance are both done online. For approval, the applicant is not required to appear before the officers. A few necessary documents can be submitted online to finish the process

Registration Process of Letter of Undertaking

Step 1: The application for Letter of Undertaking can be filed online by logging in to the GST portal.

Step 2: Next, go to the “Services” tab and click on “User Services.” From the drop-down menu, you need to select “Furnish Letter of Undertaking (LUT)”.

Step 3: A form will open up. Choose the financial year for LUT filing and upload the last financial year’s LUT (if you had filed it last year).

Step 4: Next, you need to name two witnesses along with their full address and occupation. Mention the place of LUT filing.

Step 5: You also need to get the form signed by an authorised person or the exporter. The authorised person includes the managing director, company secretary, or anyone authorised by these people to sign.

Step 6: The signature can be done digitally or via Electronic Verification Code. In the case of the latter, you will receive an OTP, which you need to punch in.

Step 7: Preview the form for any errors. If there is nothing to change, sign the form or verify it via an OTP and click on the “Proceed” button.

Step 8: Once this is done, you will receive an Application Reference Number (ARN). Note it down for future reference.

Step 9: You can download the acknowledgement copy of LUT by clicking on the “Download” button.

Documents Required of Letter of Undertaking

1. Entity’s PAN Card: A Copy of the PAN card of the exporter entity

2. KYC of Authorised Signatory: A Copy of PAN card and Aadhar card of partners/directors

3. Witnesses: Information of at least two witnesses along with the address proof and PAN

4. GST Registration: GST Registration Certificate of the exporter is required

5. IEC Certificate: The IEC certificate must be submitted

6. Cancelled cheque: A Copy of the canceled cheque of the current account of the exporter

FAQ's on Letter of Undertaking

How will I know if the LUT application has been completed?

.How is the LUT application processed?

Who is eligible to file under LUT?

What is the validity of LUT filed?

Legalsuvidha's Team:

Our Credibility:

Helped

6000+ Businesses

Experience

14+ Years

Rating

4.9 / 5 Star

Share this Service:

Free Consultation by Expert

Name

Mobile

State

Why Choose Us?

With a commitment to exceeding expectations and a passion for delivering results, choosing us means choosing a partner dedicated to your success.

Free Legal Advice

We provide free of cost consultation and legal advice to our clients.

Experts Team

We are a team of more than 15+ professionals with 11 years of experience.

Tech Driven Platform

All our services are online no need you to travel from your place.

Transparent pricing

There are no hidden & extra charges* other than the quote/invoice we provide.

100 % Client Satisfaction

We aim that all our customers are fully satisfied with our services.

On-Time Delivery

We value your time and we promise all our services are delivered on time.

Quick Response

We provide free of cost consultation and legal advice to our clients.

Our Testimonials

People Who loved our services!

In this Journey of the past 14+ years, we had gained the trust of many startups, businesses, and professionals in India and stand with a 4.9/5 rating in google reviews.We register business online and save time & paperwork.