Obtain or renew your Letter of Undertaking (LUT) to export goods or services without payment of IGST. Fast, accurate, and hassle-free assistance.
A Letter of Undertaking or LUT is a declaration furnished by an eligible registered person who intends to make zero-rated supplies without payment of Integrated GST.
Under the GST framework exports of goods or services and supplies to SEZ units or SEZ developers for authorised operations are treated as zero-rated supplies subject to the applicable conditions.
An eligible registered person can furnish an LUT and make qualifying zero-rated supplies without paying IGST upfront. This can help exporters preserve working capital and avoid the need to first pay IGST on eligible supplies and subsequently claim a refund of the tax paid.
The LUT is furnished electronically on the GST Portal in FORM GST RFD-11. The GST Portal provides the facility to furnish the LUT for the relevant financial year
An eligible registered person making zero-rated supplies may use an LUT where the prescribed conditions are satisfied.
The facility can be relevant for:
An exporter generally has two routes for making zero-rated supplies:
| Option | Treatment |
|---|---|
| LUT | Supply without payment of IGST and claim refund of eligible unutilised ITC subject to applicable conditions |
| Payment of IGST | Pay IGST on the zero-rated supply and claim refund of the eligible IGST paid subject to applicable conditions |
Furnishing an LUT can be particularly useful for businesses that regularly export goods or services because eligible exports can be made without blocking funds towards IGST payment.
It can help businesses:
An LUT furnished for a financial year generally remains valid for that financial year.
A fresh LUT should therefore be furnished for the relevant financial year when the taxpayer intends to continue making eligible zero-rated supplies under LUT.
Furnishing an LUT does not by itself make every transaction zero-rated. The underlying supply must qualify as a zero-rated supply and the applicable conditions must be satisfied.
For exports of goods or services the prescribed conditions relating to export must also be fulfilled.
| Category | Threshold | Note |
|---|---|---|
| LUT for Zero-Rated Supplies | No specific turnover threshold. | An eligible GST registered person intending to make qualifying zero-rated supplies without payment of IGST may furnish LUT in the prescribed manner. The underlying transaction must satisfy the conditions applicable to zero-rated supplies and the LUT facility. |
This service is suitable for eligible GST registered businesses that intend to make qualifying zero-rated supplies without payment of IGST.
LUT filing support for eligible exporters making zero-rated exports of goods without payment of IGST.
LUT filing support for eligible service providers making qualifying export of services without payment of IGST.
LUT filing support for eligible supplies made to SEZ units or SEZ developers for authorised operations without payment of IGST.
Review the GST registration status and proposed export or SEZ transactions to determine whether LUT is appropriate.
Collect the required taxpayer details authorised signatory information and witness details.
Prepare the LUT information in the prescribed format based on the details provided.
Furnish the LUT electronically on the GST Portal in FORM GST RFD-11. The GST Portal provides options for signing and filing through DSC or EVC as applicable.
Obtain the ARN and acknowledgement generated after successful filing and share the filing record with the client.
What's included:
Not included:
Failure to comply with the conditions applicable to supplies made under LUT may result in tax payment requirements interest and other statutory consequences depending on the nature of the default.
Failure to Export Goods: Under Rule 96A of the CGST Rules, where goods are supplied for export without payment of IGST under LUT but are not exported within the prescribed period, the taxpayer may be required to pay the applicable IGST along with interest. The prescribed period is generally 3 months from the date of issue of invoice unless the Commissioner allows a further period.
Export of Services: Where services are supplied under LUT but payment is not received in convertible foreign exchange within the prescribed period, the applicable IGST along with interest may become payable. The prescribed period is generally 1 year from the date of issue of invoice unless a further period is permitted by the Commissioner.
Interest: Where tax becomes payable because the conditions of Rule 96A are not fulfilled, interest may be payable under Section 50 of the CGST Act. The applicable interest rate is as notified under Section 50 and is calculated for the period during which the tax remains unpaid.
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