What Is LUT (Letter of Undertaking)?

Exports are zero-rated under GST, which means the government does not want tax to travel with the export. An LUT is how a registered exporter tells the GST department: "I will export without charging IGST, and if the export does not happen or I am not paid as required, I will pay the tax with interest." Under Rule 96A(1) of the CGST Rules, this undertaking is furnished in Form GST RFD-11 before the export. Once the LUT is in place, your export invoices carry no IGST, and your client pays only the invoice value. The LUT covers one financial year, so you file a fresh one each year.

For example, a GST-registered web developer in Jaipur files an LUT in April for the new financial year. Through the year, the developer issues invoices to US clients with no IGST charged, and records each one as an export under LUT in GSTR-1.

• Cash flow: Without an LUT or bond, an exporter would have to pay IGST and wait for a refund. An LUT keeps that money in your business.
• Refunds: Under section 16(3) of the IGST Act, a registered person making zero-rated supplies under bond or LUT can claim a refund of unutilised input tax credit.
• Payment deadline: For services, Rule 96A(1)(b) requires the tax and interest to be paid within fifteen days after one year from the invoice date, or the FEMA period if later, if payment is not received in convertible foreign exchange or permitted rupees.
• Export status: An export of services must meet all conditions in section 2(6) of the IGST Act, including receipt of payment in convertible foreign exchange or permitted rupees. Keep a FIRA for each payment as proof.
• Withdrawal risk: If the tax due is not paid on time, Rule 96A(3) says the LUT facility is withdrawn until the amount is paid.

An LUT works as a promise filed before export that replaces the upfront payment of IGST. You file it once for the financial year, export without IGST, and then meet the export and payment conditions for each invoice.

1. Register under GST, because only a registered person can furnish an LUT under Rule 96A(1).
2. File Form GST RFD-11 on the GST portal for the financial year before your first export in that year.
3. Issue export invoices without IGST, with a note that the supply is made under LUT. Check the exact wording with your tax adviser.
4. Report each export invoice in GSTR-1 as an export without payment of tax.
5. Receive payment from the client within the allowed period. For services, Regulation 5 of the FEMA Export and Import Regulations, 2026 sets nine months from the invoice date for foreign currency exports, which your AD bank may extend.
6. If payment does not arrive within the period in Rule 96A(1)(b), pay the IGST with interest under section 50 of the CGST Act to keep the LUT facility active.

You get an LUT by filing Form GST RFD-11 online on the GST portal. The GST portal user guide sets out the steps, and the system generates an ARN and acknowledgement once you file.

1. Log in to gst.gov.in and go to Services > User Services > Furnish Letter of Undertaking (LUT).
2. Select the financial year in the "LUT Applied for Financial Year" list.
3. If you filed an LUT on paper earlier, upload the previous LUT as a PDF or JPEG of up to 2 MB, as the user guide allows.
4. Tick all the self-declarations. CBIC's Circular No. 8/8/2017-GST, para 2(d), says a self-declaration that the conditions are met is accepted unless there is specific information otherwise.
5. Enter the names and addresses of two independent witnesses, the place of filing and the authorised signatory.
6. Sign and file with DSC or EVC. Note the ARN and download the acknowledgement PDF for your records.
7. Repeat the filing for each new financial year, because the user guide states the LUT status changes to Expired at the end of the financial year.

An LUT, a bond and paying IGST are three ways to handle GST on exports, and they differ in cash flow and eligibility. CBIC's Circular No. 8/8/2017-GST says a bond is needed only by persons prosecuted for cases involving tax evaded above ₹250 lakh, with a bank guarantee of 15% of the bond amount. Under section 16(4) of the IGST Act, exporting on payment of IGST and claiming a refund is available to classes of persons or supplies notified by the Government.

• One-time filing: An LUT is valid only for the financial year in which it is furnished, according to CBIC Circular No. 8/8/2017-GST, para 2(b). A new LUT is needed each year.
• Tax exemption: An LUT does not cancel tax liability. If the conditions in Rule 96A are not met, the exporter must pay the tax with interest.
• Large exporters only: CBIC Circular No. 8/8/2017-GST, para 2(a), explains that Notification No. 37/2017-Central Tax extended the LUT facility to all registered persons except those prosecuted for tax evasion above ₹250 lakh. The earlier condition linked to status holders and ₹1 crore of foreign remittances no longer applies.
• File after export: Rule 96A(1) says the LUT must be furnished prior to export. File it at the start of the year, before the first export invoice.
• Not needed for SEZ: Rule 96A(6) applies the same LUT requirement to zero-rated supplies to SEZ developers and SEZ units.

• Zero-rated supply: Exports and supplies to SEZ units or developers for authorised operations, defined in section 16(1) of the IGST Act.
• Form GST RFD-11: The form in which an exporter furnishes a bond or an LUT under Rule 96A.
• FIRA: A bank advice confirming that a foreign payment was credited to your account.
• FIRC: A formal bank certificate of an inward remittance, named in Rule 89 for service export refunds.
• e-BRC: Electronic Bank Realisation Certificate generated on the DGFT platform as proof of export payment.
• EDF form: The Export Declaration Form that exporters furnish under FEMA rules.

Every rule and definition on this page is linked to its official source, checked on the dates below.

1. CGST Rules, 2017, Rule 96A (Export of goods or services under bond or Letter of Undertaking), Rule 96A(1), (1)(b), (3), (4) and (6) (checked 6 Oct 2026)
2. IGST Act, 2017, Section 16 (Zero rated supply), Section 16(1), 16(3) and 16(4) (checked 6 Oct 2026)
3. IGST Act, 2017, Section 2 (Definitions), Section 2(6), export of services (checked 6 Oct 2026)
4. CBIC Circular No. 8/8/2017-GST, Clarification on issues related to furnishing of Bond/Letter of Undertaking for exports (4 October 2017), Para 1 and paras 2(a), 2(b), 2(d), 2(e), 2(f) (checked 6 Oct 2026)
5. GST Portal user guide, Furnishing of Letter of Undertaking, Filing steps, upload limits, DSC/EVC signing, ARN (checked 6 Oct 2026)
6. GST Portal user guide, Furnishing of Letter of Undertaking for Export of Goods or Services (FAQs), Signatories, witnesses, Expired status at end of FY (checked 6 Oct 2026)
7. RBI, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB), Regulation 5(1)(a) (checked 6 Oct 2026)