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GST · 25 June 2026

What Is an LUT? Exporting Without Paying IGST Upfront

A Letter of Undertaking (LUT) is a declaration in Form GST RFD-11 that lets an exporter or SEZ supplier make zero-rated supplies under Section 16 of the IGST Act without paying integrated GST (IGST) upfront. It is filed online once per financial year under Rule 96A of the CGST Rules and expires every 31 March, so a fresh LUT is needed each year. Without an LUT, an exporter must pay IGST on each export invoice and claim a refund later, which locks up working capital. The LUT carries a condition: export the goods within three months, or realise service payment within one year, or the IGST plus interest becomes due.

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Myth

Exports are tax-free, so an exporter never has to deal with IGST at all.

Fact

Exports are zero-rated, not exempt. To ship without paying IGST first and claiming it back, you must file a Letter of Undertaking in Form GST RFD-11 under Rule 96A of the CGST Rules[2].

What is an LUT?

Short answer

An LUT is a Letter of Undertaking, filed in Form GST RFD-11, that lets you export goods or services without paying IGST upfront, under Section 16 of the IGST Act[1].

Exports are zero-rated. You can either pay IGST on the export invoice and claim a refund, or sign an LUT and ship without paying it at all. The LUT is your written promise to the tax authorities that you will complete the export within the legal time limit. It is filed once, online, and covers all your export invoices for that financial year.

Who needs an LUT and how often?

Short answer

Any registered person exporting goods or services, or supplying to an SEZ, who wants to ship without paying IGST first. A fresh LUT must be filed for each financial year under Rule 96A[2].

  • An LUT runs from 1 April to 31 March and does not roll over, so file a new one at the start of every year.
  • It covers exports of both goods and services, and supplies to a Special Economic Zone.
  • Without an LUT, you must pay IGST on each export invoice and wait for a refund, which ties up cash.

What condition does the LUT carry?

Short answer

You must actually complete the export. Under Rule 96A[2], missing the deadline withdraws the facility and the IGST plus interest falls due.

  • For goods: export within three months of the invoice date.
  • For services: receive the foreign-exchange payment within one year of the invoice date.
  • Miss either window and you owe the IGST you skipped, plus interest under Section 50, generally 18% a year from the invoice date.

How does an export invoice change under an LUT?

Short answer

The invoice charges no IGST but must carry a declaration that it is a supply made under LUT without payment of IGST.

  • State on the invoice that the export is made under LUT, without payment of integrated tax.
  • Quote your LUT acknowledgement (ARN) reference so the document is self-evidencing.
  • A clean export invoice is what unlocks your zero-rated refund of input tax credit later.
Generate a clean GST export invoice in 60 seconds

References

  1. 1.Section 16, Integrated Goods and Services Tax Act 2017 — CBIC — Zero-rated supply: exports and supplies to SEZ, with the two export routes.
  2. 2.Rule 96A, Central Goods and Services Tax Rules 2017 — CBIC — Export without payment of IGST under bond or Letter of Undertaking, and its conditions.
  3. 3.Furnishing a Letter of Undertaking for export — GST portal user guide — How and where Form GST RFD-11 is filed; per-financial-year validity.

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