LUT (Letter of Undertaking)
Goods and Services Tax
GST stands for Goods and Services Tax, which is an indirect tax levied on the supply of goods and services in India. It was introduced on July 1, 2017, replacing multiple indirect taxes such as excise duty, service tax, and value-added tax (VAT), among others. GST is a comprehensive tax that is charged on every value addition, from the manufacturer to the end consumer, and is divided into Central GST (CGST) and State GST (SGST).
What is LUT (Letter of Undertaking) Filing?
LUT (Letter of Undertaking) Filing is a process that allows exporters to supply goods and services without paying any tax under the Goods and Services Tax (GST) system in India. The LUT is a legal document that is filed with the GST department to avail of the benefits of tax exemption on export of goods and services. Under the GST system, exporters are required to pay Integrated Goods and Services Tax (IGST) on the export of goods and services, which can be claimed as a refund later. However, to avoid this payment, exporters can furnish an LUT to the GST department. Once the LUT is filed, the exporter can supply goods or services without payment of IGST, subject to certain conditions.
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