Letter of Undertaking/Bond Under GST

Eligibility for LUT in place of Bond

1.   Applicable on all kind of Suppliers
2.   Registered Suppliers
3.   Has not been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws in case where the amount of tax evaded exceeds two hundred and fifty lakh rupees(INR 2,50,000).
4.   Minimum Receipts (Higher of Below 2 Figures) of Previous financial Year

·         One crore ----------------- (A)

·         Inward remittance of 10% of export turnover----(B)

S.no

Export Turnover(In INR)

10% of Total Turnover

Inward From Exports

Threshold of INR 1 Crore

Eligibilty (Yes/No)

Reason

1

15 Crore

1.5 Crore

1.5 Crore

1 Crore

Yes

(A) and (B)

2

5 Crore

.50 Crore

1 Crore

1 Crore

Yes

(B)

3

2 Crore

.20 Crore

.80 Crore

1 Crore

Yes

(A)

 

4

40 Crore

4 Crore

2 Crore

1 Crore

No

(B)

5

5.5 Crore

.55 Crore

1.1 Crore

1 Crore

Yes

(A) and (B)

 

 

 

 

 

 

 

 

 

 

 

 

 

Form for LUT/Bond

1.   Bond are on Non Judicial Stamp Paper
2.   LUT are on the letterhead containing signature and seal of the person or the person authorized in this behalf as provided in said Notification

Time for acceptance of LUT/Bond

1.   Prior to Exports includes supply to SEZ

2.   Top most priority

3.   Accepted within a period of three working days from the date of submission of LUT/bond along with complete documents by the exporter.

Key Points for Bond/LUT for Exporters

Ø  Bond or LUT is a document through which an exporter satisfies the department that the exporter shall obey all the rules and regulations relating to export. The bond or LUT is filed in the prescribed format of GST RFD – 11. 
Ø  The Bond Amount shall be equal to the tax amount on the previous year turnover or the expected export turnover. E.g. if my total expected turnover is Rs.1 crore and the tax rate on my item is 18%, then the bond amount shall be INR 18 lakh.
Ø  Bank guarantee should not be less than 15% of the bond amount. Hence, if the bond amount is equal to Rs.18 lakh, then you need to get the bank guarantee of atleast 15%, i.e. INR 2.70 Lakh.
Ø  Bank guarantee should be filed in the name of “President of India (hereinafter called " The Government") acting through the Assist. Comm./ Dy. Commissioner of Central Tax (please address to appropriate division).”

Documents for Both Bond and LUT

Bond

LUT
  • FORM RFD 11 on letter head
  • Bond on stamp paper
  • Bank guarantee
  • Authority letter
  • Other supporting documents

 
  • FORM  RFD 11 on letter head
  • UT 1 bond on stamp paper
  • Authority letter
  • Other supporting document

Procedure to file bond/LUT for exports under GST

Step 1       Check what to file bond or LUT based on condition along with jurisdiction

 

Step 2       Prepare all the necessary documents for LTU and bond under GST

S

 

tep 3       Prepare duplicate copy of LUT or bond with certain evidence

 

 

Step 4       Visit the department and go to your division

Step 5       Get the documents checked properly with the officer

Step 6       Take Acknowledgment and come back after 2 to 3 days 

Information required for Form GST RFD-11

Ø GSTIN    

Ø Name of Entity

 

Ø Document to be furnished – Bond Vs LUT

 

Ø 

Details of Bond (In case of Bond)  

o   Bank Guarantee Reference

o   Date

o   Amount

o   Name of Bank and Branch

o   Hard Copies of Bank Guarantee

Ø  Undersigned by Authorised signatory