Exporters in India can ship goods and services without paying IGST upfront by furnishing a Letter of Undertaking (LUT). This preserves working capital by avoiding the pay-tax-then-claim-refund cycle. This guide explains what an LUT is, who is eligible, and how to file it online on the GST portal.<\/p>\n
Under Section 16 of the IGST Act, 2017, the export of goods and services is treated as a zero-rated supply<\/strong>. Exporters have two options: export on payment of IGST and then claim a refund, or export without payment of IGST<\/strong> under a bond or Letter of Undertaking and claim a refund of unutilised input tax credit.<\/p>\n The LUT is furnished in Form GST RFD-11<\/strong> under Rule 96A, in which the exporter declares that they will fulfil all the requirements prescribed under GST while exporting without paying IGST. Filing is now done entirely online.<\/p>\n Any GST-registered person can furnish an LUT (Form GST RFD-11) to export without paying integrated tax if they intend to supply goods or services abroad or to a Special Economic Zone (SEZ). All registered exporters qualify except<\/strong> those prosecuted for an offence where the tax evaded exceeds Rs. 250 lakh<\/strong>. A simple self-declaration that the exporter has not been so prosecuted is sufficient.<\/p>\n An LUT is valid for the entire financial year<\/strong> in which it is furnished, and a fresh LUT must be filed each year. If goods are not exported within three months of the invoice date, or export service payment is not received within one year, the exporter must pay the applicable IGST with 18% interest<\/strong> within 15 days. Non-compliance leads to withdrawal of the LUT facility until dues are paid.<\/p>\n Furnishing an LUT lets exporters supply goods and services without paying IGST, so no tax gets blocked while waiting for a refund. This is especially valuable for SMEs, where working capital is tight. Once filed, the LUT covers the whole financial year, and if a tax officer neither processes the application nor issues a clarification notice within three working days, the application is deemed approved<\/strong>.<\/p>\n Who can use an LUT?<\/strong> Any registered taxpayer exporting goods or services, except those prosecuted for tax evasion of Rs. 2.5 crore or more.<\/p>\n Who signs the LUT?<\/strong> The primary authorised signatory or another authorised representative \u2014 such as a working partner, managing director or proprietor \u2014 via DSC or EVC.<\/p>\n How do I know filing is complete?<\/strong> The system generates an ARN and acknowledgement, and you are informed by SMS and email; the acknowledgement can be downloaded as a PDF.<\/p>\nWho is eligible to file an LUT<\/h2>\n
How to file an LUT online<\/h2>\n
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Validity of an LUT<\/h2>\n
Benefits of filing an LUT<\/h2>\n
Frequently asked questions<\/h2>\n
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