GST LUT Form — Letter of Undertaking for Exports Without Payment of GST

GST LUT Form — Letter of Undertaking

The GST LUT (Letter of Undertaking) is an annual declaration filed by exporters of goods and services on the GST portal at gst.gov.in that allows them to export without paying IGST on the export supply. Without a valid GST LUT, an exporter must pay IGST on every export and then file a refund claim to recover the IGST paid — which delays working capital recovery. With a valid GST LUT, the exporter makes the export supply as a zero-rated supply without paying any IGST, and instead accumulates ITC on inputs (which can be claimed as a GST refund).

The GST LUT is filed under Rule 96A of the CGST Rules, 2017 and is valid for the entire financial year. A new GST LUT must be filed for each financial year, typically at the beginning of April before exports commence. The GST LUT is one of the most important annual compliance actions for any export-oriented business: without a valid GST LUT in place, every export becomes an IGST payment event requiring a separate refund claim, which ties up lakhs or crores in working capital unnecessarily.

N D Savla & Associates, Chartered Accountants in Mumbai, files the GST LUT for exporting businesses at the beginning of each financial year as part of annual GST compliance and ensures the GST LUT is valid before the first export consignment of the year is dispatched. For the GST refund mechanism (both for exports under GST LUT and for IGST paid on exports), see our GST Refund Services guide.

What Is the GST LUT and Why Does It Matter for Exporters?

Under the GST framework, exports are zero-rated supplies under Section 16 of the IGST Act — they are taxed at zero rate. Zero rating is different from exemption: a zero-rated supply still gives the exporter the right to claim ITC on inputs used for that supply (unlike exempt supplies where ITC is not available). The exporter has two options for zero-rated export supplies:

• Option 1 — Pay IGST on export and claim refund: the exporter pays IGST on the export invoice and then files a GST refund claim to recover the IGST paid. While this is available, it ties up IGST payment as working capital until the refund is processed (typically 2–8 weeks). For large exporters with monthly export volumes of Rs. 1 crore+, the IGST tied up at any time can be significant.
• Option 2 — File GST LUT and export without paying IGST: the exporter files the GST LUT (Letter of Undertaking), which is an undertaking to export within the prescribed time and receive foreign exchange. Under this option, no IGST is paid on the export, and the exporter claims a GST refund of the ITC accumulated on inputs used for the export (Rule 89(4) formula). This is the preferred route for most exporters as it avoids the IGST outflow entirely.

Who Can File a GST LUT?

• Any registered exporter of goods or services is eligible to file the GST LUT.
• The only disqualification: if the registered person has been prosecuted for tax evasion involving amounts above Rs. 2.5 crore under the CGST Act or IGST Act, they are ineligible to file a GST LUT and must instead pay IGST and claim refunds.
• Foreign companies supplying to India (NRTP) are not eligible for the GST LUT as they file Form GSTR-5 separately.

GST LUT Validity and Renewal

• The GST LUT is valid for one financial year (April to March). It must be renewed at the beginning of each financial year.
• Many exporters file the GST LUT in March itself to ensure it is in place from 1 April.
• If exports are made before the GST LUT for the new year is filed: these exports are technically without a valid GST LUT, which means IGST is payable on them. To avoid this gap, N D Savla & Associates files the GST LUT renewal for all exporter clients in the first or second week of April as standard practice.
• A GST LUT filed for one year cannot be carried forward to the next year; each year requires a fresh GST LUT on the GST portal.

Conditions in the GST LUT — The Undertakings

By filing the GST LUT, the registered person undertakes:

• For export of goods: to export the goods within 3 months of the date of invoice. If goods are not exported within 3 months, the IGST liability (that was waived under the GST LUT) becomes due with interest at 18% per annum from the invoice date.
• For export of services: to receive payment in convertible foreign currency (or Indian rupees where RBI permits) within 1 year of the date of issue of the invoice. If payment is not received within 1 year, IGST becomes due with interest at 18% per annum.
• Both undertakings: that no GST refund has been incorrectly claimed and that the exporter will comply with all applicable GST provisions.
• Consequence of breach: if the conditions of the GST LUT are breached (goods not exported in time, or payment not received in time), the registered person must pay the IGST with interest from the date of invoice. The GST LUT can also be revoked for future exports if conditions are repeatedly breached.

Filing the GST LUT — Step by Step on the GST Portal

1. Log in to the GST portal at gst.gov.in with the exporter's GSTIN credentials.
2. Navigate to: Services ? User Services ? Furnish Letter of Undertaking (LUT).
3. Select the financial year for which the GST LUT is being filed.
4. Provide the details of two witnesses who are known to the registered person (name, address, occupation).
5. Review and confirm the undertakings (the conditions for export within time and receipt of foreign exchange).
6. Sign and submit the GST LUT electronically using DSC (for companies and LLPs) or EVC (for individuals and partnerships). The GST LUT is immediately effective on submission.
7. Download and retain the filed GST LUT as documentary proof of the undertaking.

GST LUT vs IGST Payment Route — Which Should You Choose?

Frequently Asked Questions — GST LUT Form