Documents and Process for using GST under LUT
Documents Required for LUT Under GST
To apply for a LUT online registration under GST, you’ll need the following documents:
- LUT Cover Letter signed by an authorized person.
- Copy of GST Registration containing GSTIN
- PAN Card of entity for Identification.
- KYC of Authorized Person (sole Proprietor or the Director or Partner)
- Authorization letter
Pre-Export Compliance with LUT (Process)
Step 1: Ensure Valid LUT is in Place
- Action: Verify that your LUT (Form GST RFD-11) is filed and valid for the current financial year. The LUT must be filed before the date of the export invoice.
- Proof: You should have the Application Reference Number (ARN) generated by the GST portal.
Step 2: Procure Goods at Concessional Rate (0.1% GST)
- Action: Place the purchase order (P.O.) with your registered domestic supplier.
- Condition: Provide a declaration to the supplier stating that the goods are being purchased for export and will be exported within 90 days from the date of the supplier’s invoice.
- Invoice: The supplier issues a Tax Invoice charging GST at the concessional rate of 1% IGST (or 0.05% CGST + 0.05% SGST if Intra-state).
- Compliance: You must be registered with an Export Promotion Council (EPC) or Commodity Board.
Step 3: Inform Supplier’s Tax Officer
- Action: Send a copy of the Purchase Order (P.O.) placed at the concessional rate to the Jurisdictional Tax Officer of the Manufacturer/Supplier.
2. Export Documentation & Shipment
Step 4: Raise the Export Invoice
- Action: Issue the Export Invoice addressed to your foreign buyer.
- Mandatory Endorsement: The invoice must clearly state: “Supply meant for Export without payment of IGST under Letter of Undertaking (LUT)” and reference your LUT ARN and date.
- Note: This invoice is raised at zero-rate (0% IGST).
Step 5: File the Shipping Bill
- Action: File the Shipping Bill (SB) with Customs through your Custom House Agent (CHA). The SB is the crucial document that proves export.
- Crucial Linkage: The Shipping Bill must clearly mention:
- That the export is being made “Without Payment of IGST” (by ticking the LUT/Bond option).
- The GSTIN and Tax Invoice Number of your domestic Supplier (the one who charged you 0.1% GST) to link the concessional purchase to the final export.
Step 6: Clearance and Shipment
- Action: Customs clearance, sealing, and shipment of goods.
- Proof of Shipment: The goods leave India, and the carrier (shipping line/airline) files the Export General Manifest (EGM) or Export Report with Customs.
3.Post-Export Compliance & Refund
Step 7: Proof of Export to Manufacturer/Supplier
- Action: As discussed, you must immediately provide the following documents to the Manufacturer/Supplier and their Jurisdictional GST Officer:
- A copy of the Shipping Bill/Bill of Export (You may redact the consignee/importer name for commercial confidentiality, but must show the supplier’s invoice details).
- Proof of filing the EGM/Export Report.
- Deadline: You must complete the export (shipment) and provide this proof within 90 days of the supplier’s invoice date.
Step 8: GST Return Filing
- GSTR-1: File GSTR-1 for the relevant tax period and report the export details (invoice number, value, destination, etc.) in Table 6A (Exports), selecting the “Without Payment of Tax”
- GSTR-3B: File GSTR-3B, declaring the zero-rated supply in Table 3.1(b) and showing the 1% IGST paid on procurement as eligible Input Tax Credit (ITC) in Table 4(A)(1).
Step 9: Claim ITC Refund
- Action: After filing GSTR-1 and GSTR-3B, file an online application for refund in Form GST RFD-01 on the GST Portal.
- Select Category: Choose the category: “Refund of unutilized Input Tax Credit (ITC) on account of zero-rated supplies made without payment of tax.”
- Processing: The GST officer will process the claim and refund the accumulated ITC (the 0.1% IGST you paid to your supplier, plus any other ITC on services/inputs) to your bank account.
The LUT route, when combined with the 0.1% concessional purchase, is highly beneficial as it ensures minimal cash is blocked in tax payments.