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GST refund denied due to non-filing of LUT

David (article Assistant) (1644 Points)

29 February 2024

Party is a export of services, has failed to furnish Letter of undertaking. All other export procedures are completed but the assessing officer denied the refund of ITC due to non filing of LUT and asked to pay GST along with interest and reclaim the GST Paid. The non filing of LUT is only a procedural lapse. and it cannot file after April of the financial year. is there any option available for the assess?

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Yasaswi Gomes new (Finance ) (4545 Points)
Replied 06 March 2024

When an exporter fails to furnish the Letter of Undertaking (LUT) for export of services, it can indeed create complications. However, there are some options available to address this situation:

Repayment and Refund:
- The exporter can repay the IGST (Integrated Goods and Services Tax) along with interest, as requested by the assessing officer. Afterward, the exporter can reclaim the GST paid by following the refund process.
- This involves repaying the tax amount and then claiming a refund. It’s essential to maintain proper documentation and comply with the refund procedures.
LUT Filing (Letter of Undertaking):
- While it’s true that the LUT cannot be filed after April of the financial year, the exporter can still consider filing it for subsequent years. The LUT allows exporters to export goods or services without paying IGST upfront.
- If the exporter can furnish the LUT for the current financial year, it will facilitate smoother export transactions without the need for immediate tax payment.
Consult a Tax Professional:
- It’s advisable for the exporter to consult a tax professional or seek guidance from relevant authorities. They can provide specific advice based on the exporter’s unique circumstances.
- A tax expert can help navigate the complexities and explore any additional options available under the GST framework.

Remember that timely compliance and accurate documentation are crucial in such cases. While the non-filing of LUT is a procedural lapse, taking corrective steps promptly can help resolve the issue and ensure smoother export operations. 🌐💼

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