A Practical Guide to GST LUT Filing
The Letter of Undertaking (LUT) is the single document that determines whether your export invoices flow without integrated tax, or whether you pay IGST upfront on every shipment and wait months for a refund. Filed once a year on the GST portal, it looks like a formality — until it is filed late, filed with the wrong details, or not renewed on time, and your working capital is suddenly locked up in a refund queue instead of your bank account. At PNPC Global, we have filed LUTs for exporters, IT/ITES companies billing overseas clients, and SEZ suppliers since the regime's early years.
Understanding the Service
A Letter of Undertaking (LUT), filed in Form GST RFD-11 under Rule 96A of the CGST Rules, 2017, is a self-declared undertaking by a registered exporter that they will fulfil all requirements prescribed for zero-rated supply — export of goods or services, or supply to a Special Economic Zone (SEZ) developer or unit — without payment of Integrated Goods and Services Tax (IGST). Under Section 16 of the IGST Act, 2017, exports and SEZ supplies are treated as zero-rated supplies, meaning the exporter can either (a) export under LUT/bond without paying IGST and separately claim a refund of accumulated input tax credit (ITC), or (b) pay IGST on the export invoice and later claim a refund of the IGST paid. The LUT route is overwhelmingly the preferred option for regular exporters because it avoids blocking working capital in an IGST-then-refund cycle and instead routes the benefit through the ITC refund mechanism, which for most services exporters and IT/ITES businesses is faster and administratively simpler to sustain month after month.
For the full scope, current process and what PNPC includes, see the dedicated GST LUT Filing service page.
Is This Relevant to Your Business?
- You export goods outside India and want to invoice without charging IGST, then recover accumulated ITC through the refund route rather than paying IGST upfront and waiting for a refund of that IGST
- You export services — IT/ITES, BPO, consulting, professional or technical services — to a client located outside India and meet the 'export of services' conditions under Section 2(6) of the IGST Act (supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange or permitted INR, and supplier and recipient are not merely establishments of a distinct person)
- You supply goods or services to a Special Economic Zone (SEZ) developer or SEZ unit for authorised operations — such supplies are also zero-rated and can be made under LUT without IGST
- Your business model runs on a continuous, monthly rhythm of export invoicing and you want predictable, IGST-free billing rather than a payment-then-refund cycle repeated on every invoice
Before You Assume You Need This
- You are a domestic-only business with no export or SEZ supply activity — LUT is only relevant to zero-rated supplies; a purely domestic supplier has no LUT filing obligation and should not file one
- You occasionally make a single export shipment and prefer to pay IGST on that one invoice and separately claim a refund of the IGST paid — for a genuinely one-off transaction, some exporters find the pay-and-refund route administratively simpler than maintaining a running LUT undertaking, though for anyone with recurring exports the LUT route is materially better for cash flow
- Your entity's registration is under suspension or cancellation proceedings — a LUT cannot be meaningfully furnished or relied upon while the underlying GSTIN's status is in question; the registration issue must be resolved first
Quick Answers
What exactly is a Letter of Undertaking (LUT) under GST?
A LUT, filed in Form GST RFD-11 under Rule 96A of the CGST Rules, is a self-declared undertaking by an exporter that they will comply with the conditions for zero-rated supply — exporting the goods or services (or supplying to an SEZ unit/developer) and realising the proceeds within the prescribed timelines — so that IGST does not need to be paid at the time of invoicing. It replaces the older, more cumbersome requirement of furnishing a bond with a bank guarantee for most exporters.
Who is eligible to file a LUT instead of a bond with bank guarantee?
Under Notification No. That narrow category must furnish a bond with bank guarantee instead.
Does a new business need any track record or minimum turnover before it can file a LUT?
No. There is no minimum turnover, no minimum period of registration, and no export track-record requirement for LUT eligibility. A business can furnish a LUT from its very first day of GST registration if it intends to export goods or services or supply to an SEZ.
Working With PNPC Global
A LUT costs nothing to file and takes minutes on the portal — what actually protects your export cash flow is the year of tracking after it. Talk to PNPC before your next export invoice, or before your current LUT's financial year runs out.
PNPC Global has advised Chennai, Bangalore and Hyderabad businesses since 1986. Explore the full GST practice for related services, or go straight to the GST LUT Filing page for specifics.
Specific rates, fees, thresholds and deadlines are set by the relevant authority and change over time — this article deliberately does not quote figures that could go stale. Confirm current numbers directly with PNPC or the official source before you act.