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Filing of LUT in GST for Exporters

Are you an exporter looking to simplify GST compliance and preserve working capital? A Letter of Undertaking allows an eligible registered person to export goods or services, or make other permitted zero-rated supplies, without paying Integrated Goods and Services Tax upfront.

The LUT is furnished electronically in Form GST RFD-11 on the GST Portal. It is subject to statutory conditions and must be renewed for every financial year in which the facility is used.

LegallensIndia assists exporters with eligibility review, document preparation, online LUT filing, acknowledgement download, and continuing compliance under Rule 96A.

What is a Letter of Undertaking under GST?

A Letter of Undertaking, commonly called an LUT, is a declaration furnished by an eligible registered person undertaking to satisfy the prescribed export conditions. Once accepted, it permits zero-rated supplies without payment of IGST, avoiding the need to pay tax first and subsequently apply for a refund.

Exporters may alternatively export on payment of IGST and claim an eligible refund. The LUT route is useful where the exporter wants to avoid blocking funds in upfront tax payments.

The LUT does not remove GST recordkeeping, invoicing, return-filing, foreign-exchange realisation, or other export obligations. It only provides the permitted route for making zero-rated supplies without payment of IGST.

Who is Eligible to File an LUT?

The LUT facility is generally available to registered persons who intend to make zero-rated supplies without payment of IGST. It is not available where the person has been prosecuted for an offence under the GST or specified earlier indirect-tax laws involving tax evasion exceeding ₹2.5 crore.

A valid GST registration must be active.
The applicant must intend to export goods or services, or make another eligible zero-rated supply, without payment of IGST.
The applicant must not fall within the prescribed prosecution-based exclusion.
The LUT must be furnished before making supplies under the LUT route.
The authorised signatory must be permitted to submit and verify the undertaking for the registered person.

Transactions Covered by an LUT

Export of Goods: Dispatch of goods outside India without payment of IGST, subject to export and customs requirements.
Export of Services: Supply of services qualifying as an export under the IGST Act, including the applicable place-of-supply and payment conditions.
Supply to an SEZ: Eligible supply of goods or services to an SEZ developer or SEZ unit for authorised operations.

A transaction must independently satisfy the legal requirements for a zero-rated supply. Filing an LUT does not by itself convert a domestic or otherwise ineligible transaction into an export or SEZ supply.

LUT and Export Bond – Key Difference

Basis	Letter of Undertaking	Export Bond
Who uses it?	Eligible registered persons making zero-rated supplies without IGST.	Persons who are not eligible to use the LUT facility.
Form	Form GST RFD-11, ordinarily furnished online.	Bond furnished in the prescribed manner and supported by required documents.
Security	A bank guarantee is generally not required.	A bank guarantee may be required, ordinarily up to 15% of the bond amount, subject to the competent authority's discretion.
Validity	Valid for the financial year in which it is furnished.	Operates according to its terms and the amount of outstanding tax liability covered.

Validity and Rule 96A Compliance

An LUT is valid for the financial year in which it is furnished. A fresh LUT should be filed for each new financial year before using the facility. Exporters must also comply with the prescribed time limits.

Export of Goods: Goods should be exported within three months from the date of the invoice, unless the jurisdictional Commissioner allows further time.
Export of Services: Payment should be received in convertible foreign exchange, or in Indian rupees where permitted by the RBI, within one year from the invoice date, unless further time is allowed.
Failure to Meet Conditions: The exporter must pay the applicable tax with interest within the period prescribed by Rule 96A if the export or payment condition is not met.
Restoration: The LUT facility may be restored after the amount due is paid, subject to the applicable rules and officer action.

Documents and Information Commonly Required

The GST Portal filing is declaration-based, but the following records should commonly be kept ready. Requirements may vary according to the applicant and any query raised by the department.

GSTIN, legal name, trade name, address, email, and mobile number.
PAN and identity details of the registered person and authorised signatory.
Authorisation letter, board resolution, or other authority for the signatory, where applicable.
Import Export Code and export-related registration details, where applicable.
Details of two independent witnesses requested in Form GST RFD-11.
Previous financial year's LUT acknowledgement, where relevant.
Export invoices, shipping bills, bank realisation records, and SEZ endorsement records for ongoing compliance.

Benefits of Filing an LUT

No Upfront IGST: Eligible zero-rated supplies can be made without first paying IGST.
Better Cash Flow: Funds remain available for operations instead of being blocked until a refund is processed.
Reduced Refund Dependency: The exporter need not routinely claim a refund of IGST paid on every export under this route.
Online Filing: The application and acknowledgement are ordinarily handled through the GST Portal.
Financial-Year Coverage: One accepted LUT can support eligible supplies throughout that financial year, subject to continued compliance.

Online Process for Filing GST LUT

Step 1: Confirm Eligibility

Verify the GST registration, proposed zero-rated supplies, authorised signatory, and prosecution history before choosing the LUT route.

Step 2: Prepare the Details

Collect the financial year, witness details, previous LUT information, authorised-signatory records, and supporting export information.

Step 3: Open Form GST RFD-11

Step 4: Select the Financial Year

Choose the relevant financial year and provide or upload previous LUT information where the Portal requests it.

Step 5: Complete the Declaration

Enter the required witness and signatory information, review the statutory undertakings, and confirm that the details are accurate.

Step 6: Sign and Submit

Submit the LUT using DSC or EVC, as permitted for the applicant's constitution and authorised signatory.

Step 7: Download the Acknowledgement

Save the acknowledgement and Application Reference Number generated after successful filing. Keep them with the export compliance records.

Important Points for Exporters

File a new LUT at the beginning of every financial year before making supplies without IGST under it.
Use the correct export endorsement on invoices and report transactions accurately in GST returns.
Maintain shipping bills, export general manifests, foreign inward remittance or bank realisation evidence, and SEZ endorsements as applicable.
Monitor the three-month goods-export and one-year service-payment deadlines and apply for an extension before a delay becomes non-compliance.
Reconcile export invoices across GST returns, customs records, e-invoices, and banking documents.
Pay tax and interest promptly where a statutory export condition is not fulfilled.

How LegallensIndia Can Help

LegallensIndia supports exporters through eligibility assessment, Form GST RFD-11 preparation, authorised-signatory verification, online submission, acknowledgement retrieval, and renewal tracking. Our professionals can also assist with export-document review, return reconciliation, departmental queries, and corrective compliance when Rule 96A conditions are at risk.

Contact LegallensIndia to file your GST LUT accurately and keep your zero-rated supplies compliant throughout the financial year..

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