GST LUT Bond Registration

Furnish fresh LUT for FY 2019-20

LUT will be valid only for a financial year. For example, if you have furnished LUT in FY 2018-19, then it will expire on 31^st March 2019, and you will have to furnish fresh LUT for FY 2019-20.

Under GST laws, the exporter is provided the option by the government pay IGST and then claim refund at a later date. The government has been working hard to ease the entire process of claiming refund by exporters. Exporters who are exporting goods or services need not file refund application (GST RFD-01) separately. This is because the shipping that the exporter furnishes is treated as a claim for refund in itself.

1. Input tax credits on goods and services which have not been utilized.
2. IGST that has been paid by the trader while exporting goods or services.

However, as per the law the shipping bill can serve as a claim for refund only when it meets the following two conditions:

The person carrying export goods will have to first and foremost file an export manifest and

The applicant also needs to file the returns GSTR-3 or GSTR-3B in a proper manner. Also, the table 6A in Form GSTR-1 needs to be filled in order to, claim the refund.

The department will process the refunds after it checks all the documents and is satisfied that all the form shave been filled in a proper and appropriate manner with all the details properly mentioned.

It is a type of bank guarantee, under which its customer is allowed to take a loan from another Indian bank’s foreign branch on a short term basis. The primary purpose of facilitating such an arrangement is to ensure that the owner of the ship or aircraft would:

Implement stringent security measures on the vehicle

Enter an appearance acknowledge ownership and

Pay a final decree on the vehicle irrespective of the fact whether it is lost or not

Bonds are financial instruments which serve as a form of borrowing. The people buying these bonds are, loaning money to the issuer of the bond for a fixed period of time. At the end of that period, the value of the bond is repaid as the issuer is obliged to pay the holders the principal. Bond holders also receive a pre-determined interest rate paid annually. Bonds unlike shares are highly secure and they are also highly liquid assets which are also negotiable. It means their ownership is easily transferable from one holder to another. Municipal bonds and corporate bonds are the more common types of bonds.

IB-1 Surety / Security (General Bond) is furnished in case of furnishing bonds for exports. A distinguishing feature of these bonds is that it has a guarantor who takes responsibility for the fulfillment of obligations on behalf of the person who has furnished the bond.

The facility of LUTs can be taken by any registered taxpayer who exports goods and services. However, it is very important to note here that any person who has faced prosecution for tax evasion amount to 2.5 crores and more is debarred from availing this facility. Such exporter will have to furnish a bond. Also to be noted is the fact that the validity of a LUT is for one financial year and you have to get a fresh LUT for next financial year i.e. an exporter has to furnish fresh LUT every year. Failure to meet the conditions specified within the given time frame will lead to revocation of privileges and under such circumstances, the exporter will be compelled to furnish a bond.

LUTs can be furnished and submitted online through the GST portal. The ways and means of doing it online is easily available on the Net. However, as far as bonds are concerned, they need to be furnished manually as the department requires a hardcopy of it.

Example of transactions for which permission to use LUT/Bonds is available

1. Zero-rated supply to SEZ in which IGST is not paid
2. Export of goods to a foreign country in which IGST is not paid
3. Export of services to a foreign country in which IGST is not paid

As per the specifications laid in Rule 96A of the CGST Rules,

An exporter will be compelled to pay taxes along with the requisite interest:

If the exporter fails to export the goods within three months of issuing the export invoice. Form GSTR-1 with details of invoices of export need to be filled to show that export has indeed taken place.