Cancellation of LUT

[BDO India Services Private Limited]

Hi all!

One of our clients used to make exports with payment of tax after filing of LUT for F.Y. 20-21.Now the client wants to know if we can cancel our LUT and pay the taxes on it?

Can we still pay the taxes on exports even after being granted an LUT?

There is a lot of un-utilised ITC credit available.

AI Summary

Export under LUT optional: exporter may elect to pay tax instead of using LUT; lapse requires compliance to restore.
Exporters may elect to pay tax instead of exporting under an accepted LUT; acceptance of LUT does not preclude payment. The LUT is valid for the financial year tendered but will be deemed withdrawn if exports are not made within prescribed timeframes and specified amounts are unpaid; payment restores the facility. While the LUT facility is withdrawn, exports must be on payment of integrated tax or under bond with bank guarantee.