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LUT in GST: Letter of Undertaking for Exporters
Goods and Services Tax (GST) is an indirect tax system introduced in India on 1st July 2017. It replaced many old taxes like VAT, service tax, excise duty, and others. GST made the tax system simpler and more transparent. Under GST, businesses that export goods or services have special benefits. One of the most important benefits for exporters is the facility of LUT in GST.
Export goods and services without paying IGST upfront. Learn what LUT in GST means, who can file it, documents required, and the step-by-step online process — all in one place.
What is LUT in GST?
LUT in GST stands for Letter of Undertaking — a declaration filed by registered exporters under the GST regime that allows them to export goods or services without paying Integrated GST (IGST) at the time of export.
Under Section 16(3) of the IGST Act, 2017, exporters are given two options — either pay IGST and claim a refund later, or furnish an LUT/Bond to export on a zero-rated basis without tax payment. Filing an LUT is almost always the smarter choice as it preserves working capital.
Who is Eligible to File LUT in GST?
Not every exporter can opt for the LUT route. The following taxpayers are eligible to furnish an LUT instead of a Bond:
- Registered GST taxpayers who export goods or services outside India
- Suppliers making zero-rated supplies to SEZ (Special Economic Zones) units or developers
- Exporters who have not been prosecuted for any offence under the CGST/IGST Act where the tax evaded exceeds ₹2.5 Crore
⚠️ Important: If you have been convicted of an offence under GST or any other fiscal law, you will not be eligible for the LUT route and must instead furnish a Bond with bank guarantee.
Benefits of Letter of Undertaking (LUT) Filing in GST
LUT in GST is important because it helps exporters in the following ways:
1. No Need to Pay Tax Before Export
Without LUT, exporters must first pay IGST and later claim a refund. This process can take time. With LUT, they do not need to pay IGST at all.
2. Faster Refund Process
Since exporters don’t pay IGST, they don’t need to claim refunds, The LUT ensures that the export transaction proceeds without tax delays.
3. Improved Cash Flow
By eliminating the need to pay taxes upfront, businesses can have more liquidity and improve their cash flow, especially for small and medium-sized enterprises (SMEs) involved in international trade.
4. Simplification of Export Procedures
The LUT in GST mechanism simplifies the overall export procedure by reducing paperwork and eliminating the need for tax payments on exports.
What is Zero-Rated Supply?
To understand LUT in GST better, we must know about zero-rated supply.
Under GST, exports are called zero-rated supplies. This means:
- GST rate is 0%.
- Input tax credit (ITC) can still be claimed.
There are two options for exporters:
- Export with payment of IGST and claim refund later.
- Export without payment of IGST under LUT in GST.
Most exporters prefer the second option because it saves time and money.
Documents Required for LUT in GST
- GST User id and Password
- Pan card of 2 Witness
- Adhaar card of 2 Witness
- Occuptation of Both Witness
- Cancel Cheque of Entity
- Copy of Last Filed LUT (if any)
Validity and Renewal of LUT in GST
An LUT in GST is valid for one financial year (April 1 to March 31). It must be renewed at the start of every new financial year. Key renewal points to remember:
- File a fresh LUT before April 1 each year to avoid disruption in zero-rated exports
- If LUT is filed after April 1, exports made before the filing date in the new FY may require IGST payment or a bond for that period
- The renewal process is identical to the initial filing process — same form, same portal
- Always download and save your LUT acknowledgement — shipping lines and SEZ authorities may ask for it
What Happens if LUT is Not Filed?
If an exporter does not file LUT in GST, they must:
- Pay IGST at the time of export.
- Later apply for a refund.
This can lead to:
- Delay in refund.
- Blockage of working capital.
- Extra paperwork.
Therefore, filing LUT is highly beneficial for exporters
Is LUT Required for Every Export Invoice?
Yes, LUT in GST covers all export transactions during the financial year.
Once filed, you can export multiple times without paying IGST under the same LUT, as long as it is valid.
On export invoices, you must mention:
“Supply meant for export under LUT without payment of IGST.”
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FAQ on LUT in GST
LUT stands for Letter of Undertaking under the Goods and Services Tax (GST) system.
It is a document that allows exporters to supply goods or services without paying Integrated GST (IGST) at the time of export.
Any registered taxpayer engaged in the export of goods or services can file an LUT, provided they meet certain eligibility criteria. This includes exporters who wish to avoid paying IGST on their exports.
To be eligible for filing an LUT, exporters must:
- Be a registered taxpayer under GST.
- Be engaged in the export of goods or services.
- Have no pending tax liabilities or arrears.
- Maintain a satisfactory compliance track record, including timely filing of GST returns.
Filing a Letter of Undertaking (LUT) under the Goods and Services Tax is simple and can be done online through the GST portal. Here’s a clear step-by-step process:
Step 1: Login to GST Portal
Visit the GST portal and log in using your credentials (GSTIN, username, and password).
Step 2: Navigate to LUT Filing
Go to:
Services → User Services → Furnish Letter of Undertaking (LUT)
Step 3: Select Financial Year
Choose the relevant financial year for which you want to file the LUT.
Step 4: Fill the LUT Form
- You’ll see a pre-filled form (GST RFD-11)
- Accept the declaration by checking the box
- Enter details of two witnesses (name, address, occupation)
Step 5: Attach Documents (if required)
Generally, no documents are required, but keep details handy for verification.
Step 6: Sign and Submit
- Submit using DSC (Digital Signature Certificate) or EVC (OTP verification)
- Once submitted, an ARN (Acknowledgment Reference Number) is generated
Step 7: Download LUT
After submission, download the filed LUT for your records.
The following documents are typically required:
- A cover letter requesting the LUT, signed by an authorized person.
- Details of two independent witnesses.
- Any previously approved LUTs (if applicable).
An LUT is valid for one financial year. Exporters must renew their LUT annually if they wish to continue exporting without paying IGST.
If you do not file an LUT before exporting, you may be liable to pay the full amount of IGST along with potential penalties, which can be up to 100% of the IGST that should have been paid.
Yes, it is advisable to mention the LUT number on invoices related to exports made under the Letter of Undertaking to ensure compliance and facilitate processing.
If your application is rejected, you will receive a notice explaining the reasons for rejection. You may then address these issues and reapply.
You can apply for a Letter of Undertaking (LUT) under Goods and Services Tax by logging into the GST portal and navigating to Services → User Services → Furnish LUT. Select the financial year, fill in the required details, accept the declaration, and submit the form using DSC or OTP.
Once submitted, you can download the LUT acknowledgment for your records.
In exports, LUT stands for Letter of Undertaking under the Goods and Services Tax.
It is a declaration filed by exporters that allows them to export goods or services without paying IGST (Integrated GST) at the time of export.
In simple terms:
An LUT lets exporters supply internationally without paying tax upfront, avoiding the need to claim refunds later.
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