How to Renew Letter of Undertaking (LUT) on the GST Portal?

The Letter of Undertaking (LUT) is a very important document for every exporter under the Goods and Services Tax (GST) regime in India to ensure compliance with tax regulations. It allows exporters to ship goods or services without paying Integrated GST (IGST), provided they commit to fulfilling all GST requirements, it saves the time and make the atmosphere of accountability. Since the LUT is valid for one financial year, it must be renewed annually to continue availing of tax-free exports. This comprehensive article guides the exporters that how to walks through the entire process of renewing the LUT on the GST portal, it will guide step by step to make it easy.

Importance of LUT Renewal

Renewing the LUT ensures uninterrupted benefits for exporters, allowing them to:

• Export goods or services without upfront IGST payment.
• Avoid the process of claiming refunds for taxes paid.
• Maintain smooth business operations by preventing export delays.

Failing to renew the LUT can lead to export disruptions and increased financial burdens due to IGST payments.

Eligibility Criteria for LUT Renewal

To renew the LUT, an exporter must meet the following conditions:

• Must be registered under GST.
• Should not have been prosecuted for tax evasion exceeding Rs. 2.5 crores under the GST or any other tax law.
• Export goods or services, including supplies to Special Economic Zones (SEZs).

Documents Required for LUT Renewal

Before initiating the renewal process, ensure the following documents are ready:

1. GSTIN (Goods and Services Tax Identification Number)
2. Previous LUT acknowledgement (for reference)
3. Authorization letter (if filed by an authorized signatory)
4. PAN card of the business entity
5. Export invoices (if required for validation)
6. Digital Signature Certificate (DSC) or Electronic Verification Code (EVC)

Step-by-Step Process to Renew LUT on the GST Portal

Here’s a detailed breakdown of the renewal process:

Step 1: Log in to the GST Portal

1. Visit gst.gov.in.
2. Enter your GSTIN, username, and password.
3. Complete the CAPTCHA and click “Login.”

Step 2: Navigate to the LUT Application Form

1. On the dashboard, go to Services > User Services > Furnish Letter of Undertaking (LUT).
2. The system will show the option for the upcoming financial year’s LUT renewal.

Step 3: Fill the LUT Form

1. Select the upcoming financial year for renewal.
2. Upload the necessary required documents, including the LUT form.
3. Read and accept the terms and conditions which are given under the undertaking of the renewal form.

Step 4: Add Witness Details

1. Enter the names, addresses, and occupations of two witnesses.
2. Ensure their details are accurate, as they confirm your undertaking.

Step 5: Sign and Submit the Application

1. Choose your preferred verification method:
   • Digital Signature Certificate (DSC): Ideal for companies and LLPs.
   • Electronic Verification Code (EVC): Suitable for individual proprietors or partnerships.
2. Click Verification of required details, submit the application, and sign electronically with the help of digital mode.

Step 6: Acknowledgment and Tracking

1. Upon successful submission, you will get an acknowledgement receipt with an Application Reference Number (ARN).
2. Track the status under Services > Track Application Status.

Common Challenges and Solutions

1. Portal Errors: Clear browser cache and try again. If the issue persists, contact GST helpdesk.
2. DSC Issues: Ensure the DSC is valid, drivers are updated, and the browser supports DSC.
3. Application Rejection: Check the required documents properly and details before submitting them to avoid unnecessary delay.

Tips for Smooth LUT Renewal

To ensure a hassle-free renewal process, consider the following tips:

• Start Early: Always initiate the process of renewal on time at least one month before the financial year ends, to avoid unnecessary delay.
• Document Readiness: Keep all required documents scanned and organized.
• Browser Compatibility: Use GST portal-recommended browsers like Google Chrome or Mozilla Firefox.
• Regular Portal Checks: Log in to the GST portal periodically to check for any notifications or updates.
• Legal Implications of Non-Renewal
• IGST Liability: IGST need to be paid by the exporters on all exports until their LUT get renewed, as per the tax regulations.
• Delayed Refunds: If IGST is paid, exporters must file for refunds, which can take weeks to process.
• Penalties and Interest: In some cases, late fees or interest may apply for delayed compliance.
• Importance of Record-Keeping

Maintaining proper records is crucial for LUT renewal and future audits. Keep the following documents organized:

• Copies of previous LUTs.
• Export invoices and shipping bills.
• GST returns are filed under GSTR-1 and GSTR-3B.
• Correspondence related to LUT filing and renewal.

Conclusion

Renewing the Letter of Undertaking on the GST portal is a very important element for exporters to continue their business of exporting goods and services without IGST payment and to avoid various legal complications. With the help of following the step-by-step process as we have discussed above in this article and ensuring timely submission, businesses can enjoy uninterrupted export benefits. Always Keep your documents ready, stay updated with GST portal notifications and renew your LUT promptly to streamline your export operations to avoid unnecessary delays and complications.

Effective renewal is very beneficial not only for ensures compliance but it also helps exporters maintain their cash flow in the continuity by avoiding unnecessary tax payments and refund claims.

By staying updated with GST regulations and adhering to renewal timelines, exporters can focus on business growth while enjoying seamless cross-border trade without tax hurdles. Proper planning, documentation, and timely action will ensure that your export journey remains smooth and financially efficient.

Frequently Asked Questions

1. When should I renew my LUT?

LUT renewal is an important to keep the process of LUT to be continued so that is why it needs to done before the end date of the current financial year to avoid export disruptions and other complexities.

2. Is there a fee for LUT renewal?

No, the GST portal does not charge any fee for LUT filing or renewal.

3. Can I file exports without an active LUT?

No, you will need to pay IGST on exports without a valid LUT and claim a refund later.

4. What happens if I miss the renewal deadline?

If you miss the renewal deadline, you must pay IGST on exports until a new LUT is filed and approved. This can lead to increased financial outflow and administrative hassles.

5. Can I renew the LUT offline?

No, the LUT renewal process is entirely an online process through the GST portal. There is no offline submission option.

6. Is it mandatory to renew the LUT every year?

Yes, the LUT is valid for one financial year, and exporters must file a fresh LUT at the beginning of each financial year