A Letter of Undertaking (LUT) lets a GST-registered exporter ship goods or services without paying IGST upfront. Instead of paying tax and waiting for a refund, you file an LUT and export at a zero rate, keeping your working capital free. The LUT is filed online on the GST portal in Form GST RFD-11, is free, and is approved almost automatically for eligible exporters. It must be filed afresh for each financial year. Samkhya files your LUT and manages your export GST compliance.
Exports are zero-rated under GST, which can be claimed in two ways: by paying IGST on the export and claiming a refund, or by filing a Letter of Undertaking and exporting without paying IGST at all. The LUT route is preferred because it does not lock up working capital in refund claims. An LUT is filed online in Form GST RFD-11 before the start of, or early in, each financial year, and a single LUT covers all of that year’s exports. By filing it, the exporter undertakes to export within the prescribed time and to receive payment in convertible foreign exchange, in line with Rule 96A. Any GST-registered exporter can file an LUT, except those prosecuted for tax evasion exceeding Rs. 2.5 crore, who must instead furnish a bond with a bank guarantee.
Filing an LUT offers clear advantages:
A few conditions apply to an LUT:
An LUT is useful in these situations:
Eligibility to file an LUT is as follows:
The LUT is filed online on the GST portal under the exporter’s GSTIN, in Form GST RFD-11, with no physical documents required. The exporter selects the financial year, ticks the three undertakings on the form (to export within the prescribed time, to comply with GST provisions, and to pay IGST with interest if the conditions are not met), enters the details of two witnesses, and submits the form using a Digital Signature Certificate or EVC. Acceptance is generated on the portal automatically for eligible exporters, and an acknowledgement with the application reference number can be downloaded. The accepted LUT is then quoted on export invoices with the declaration that the supply is made under LUT without payment of IGST.
Since the LUT is filed online with nothing to upload, you mainly need the details ready:
Filing an LUT follows a quick sequence:
Filing your LUT with Samkhya Corporate Services is simple. Just follow these easy steps:
From there, our team files the LUT and supports your export invoicing and returns.
Keep your LUT compliant through the year:
Under GST, exports are zero-rated, meaning no GST is ultimately payable on them. Without an LUT, an exporter must pay IGST on each export invoice and then claim it back as a refund, which can take 60 to 90 days and ties up working capital. By filing an LUT, the exporter is allowed to make the supply without charging or paying IGST at all, so there is no tax to recover and cash flow stays free. The exporter can still claim a refund of accumulated input tax credit on the inputs used for those zero-rated supplies. The LUT itself is free and involves no tax cost; it is simply the mechanism that delivers the zero-rating up front. If the export conditions under Rule 96A are not met, the unpaid IGST becomes payable with interest.
| Feature | Export under LUT | Export with IGST + Refund |
| IGST on Export | Not paid. | Paid, then refunded. |
| Working Capital | Stays free. | Locked until refund. |
| Refund Wait | Not applicable. | Typically 60 to 90 days. |
| Filing | One LUT per financial year. | A refund claim per export. |
| Input Tax Credit | Refund of accumulated ITC. | IGST refunded; ITC as usual. |
| Best For | Regular exporters. | Occasional or ineligible exporters. |
What is an LUT?
A Letter of Undertaking is a declaration filed by a GST-registered exporter that lets them export goods or services without paying IGST upfront, keeping working capital free.
How is an LUT filed?
It is filed online on the GST portal in Form GST RFD-11, with no documents to upload, and is approved almost automatically for eligible exporters.
How often must an LUT be filed?
A fresh LUT must be filed for each financial year, ideally before raising the first export invoice of that year.
Who is not eligible to file an LUT?
Exporters who have been prosecuted for tax evasion exceeding Rs. 2.5 crore cannot file an LUT and must furnish a bond with a bank guarantee instead.
What happens without an LUT?
Without an LUT you must pay IGST on each export and claim a refund later, which can take 60 to 90 days and blocks working capital.
Does an LUT apply to service exporters?
Yes. Software developers, consultants, freelancers, and other service exporters use an LUT to invoice overseas clients without charging IGST.
