Government peps up export promotion by enabling online filing of Letters of Undertaking
GST Registration has indeed arisen as a way out to all the despair that existed in the erstwhile tax regime. Through removal of superfluous ambiguities and liabilities, GST has emerged as the inimitable tax policy to redress all the complications of trade. Considering its significant contribution to the escalation of India’s GDP, the government is all set to implement the GST tax policy as an instrument of export promotion.
Recently, this has been more firmly justified as the GST Department has enabled online filing of LoU (Letter of Undertaking) for the exporters in India.
What is the concept of LOU?
Post GST implementation, the manufacturers and traders involved in import-export trade had to pay IGST on the purchases of input. They could claim the GST refund later on, which was unquestionably a tedious and long drawn procedure. Many traders were still facing the anguish despite getting enough time for migration to the new tax regime through GST registration procedure and IEC Registration, given they are generally trapped in extreme liquidity crunch.
To rule out the hassles, the government has implemented the new policy wherein these traders can now sign a LoU with the GST authority and get relieved of GST on input if their motive is export.
The Backdrop of the decision
Lately, the system had witnessed numerous grievances from the exporters regarding the delay in refund of the input credit on account of faulty customs process, erroneously filled shipping bills and disparity in GST return filing. The ensuing blame-game between the exporters and the GST Department had to go against the authorities as the naïve exporter couldn’t be expected to be conversant with laws regarding GST return filing. This soon became the Achilles heel for the government in the encouragement of entrepreneurship.
To overcome all these anomalies, GST Department had introduced the system of LoU (Letter of Undertaking) for the exporters. To make this system even more swift and seamless, the authorities have now enabled the online service of filing LoU.
The complete process of filing LoU online:
Log in to the GST Portal with all credentials.
Select the 'services' menu. Under this, select User Services sub-menu and click on 'Furnish Letter of Undertaking (LUT)’ tab. |
On the below screen, you need to select the Financial year for which you have to file your LUT.
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Next step involves the filing of LUT with the President of India. As export promotion is the central criteria for the filing of LUT, the first 2 checkboxes have to be ticked by the user, as shown below.
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Now, enter name and details of 2 witnesses.
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Next, you need to enter the name of the authorized signatory who will sign LUT with the place.
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Finally, click "Sign and File with DSC" button. The LoU will appear as shown below-
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Note: The LoU once signed can never be edited
Very importantly, the traders are required to possess their unique Import Exports code for availing this service.
In case you need any support or guidance relating to online Registration for import exports code online or regarding GST Registration or GST return filing, feel free to contact us at 8881-069-069.