File your GST LUT,export without the cash-flow drag.

The Letter of Undertaking is one of the smallest GST filings by size and one of the most valuable by cash-flow impact. These are the four patterns behind almost every LUT application:

1. i.

   Annual renewal, coming up on 1 April

   A regular exporter with LUT already filed for the current financial year. The new financial year is approaching (or has just started) and the LUT needs to be renewed for the new year. Filing before 1 April ensures no export interruption.

   Renew LUT for the new year→
2. ii.

   First-time exporter after GST registration

   A newly-GST-registered business is about to make its first export. Filing the LUT before the first export invoice is issued ensures the invoice is zero-rated under LUT rather than IGST-paid. Getting this right at the first invoice saves months of refund complexity.

   File LUT before first export→
3. iii.

   SEZ supplier making zero-rated supplies

   A DTA (Domestic Tariff Area) supplier making supplies to a SEZ unit. Section 16 of the IGST Act treats supplies to SEZ as zero-rated exports. An LUT lets the supplier deliver without IGST, which the SEZ buyer would otherwise have to claim as refund, a mutually-beneficial cash-flow saving.

   File LUT for SEZ supplies→
4. iv.

   Service exporter billing overseas clients

   An IT/ITeS business, consulting firm, or freelancer billing overseas clients in foreign currency. Service exports are zero-rated under Section 16 of the IGST Act. Without LUT, IGST would be charged on each invoice and refunded later; with LUT, the invoice is directly zero-rated. Cash-flow benefit is meaningful.

   File LUT for service exports→

Form GST RFD-11 is the Letter of Undertaking that the exporter files with the GST authorities. It is a bond-like undertaking that the exporter will comply with export requirements, most importantly that the export proceeds will be realised within the time prescribed under FEMA (typically 9 months of shipment).

The LUT is filed entirely online on the GST portal (gst.gov.in) under Services > User Services > Furnish Letter of Undertaking. The exporter's details, GSTIN, and IEC are pre-filled from the GST profile. Two witnesses are added, the form is signed digitally, and submitted.

Approval is generally automated. Within 24-48 hours of submission, the LUT is acknowledged and available for download. The LUT is valid from the date of filing until 31 March of the current financial year, and needs to be renewed each year for continued zero-rated exports.

The outputs

• FORM GST RFD-11
  The Letter of Undertaking. Filed online on the GST portal. Digitally signed by the authorised signatory. Valid until 31 March of the current financial year.
• ARN (ACKNOWLEDGEMENT REFERENCE NUMBER)
  Issued at the time of submission. Used to track the status of the LUT and to reference it in subsequent GST returns.
• LUT ACKNOWLEDGEMENT
  Downloadable from the portal within 24-48 hours of submission. This is the operative document to be retained for record and produced at the time of any refund claim or scrutiny.

Most LUT filings wrap within a couple of days from the first engagement. The portal-side approval is largely automated; only the drafting and DSC-signing steps involve human action.

1. Day 1

   Briefing and eligibility check

   You share the GSTIN, IEC, and details of the intended export activity. Eligibility under Rule 96A is confirmed: GST-registered exporter with no prosecution history for tax evasion above ₹2.5 crore in the last five years.

2. Day 1

   LUT form drafting

   Form RFD-11 (LUT for the financial year) is drafted with the exporter's details, GSTIN, IEC, and PAN. Two witnesses are identified from among trusted acquaintances of the business (typically employees or fellow directors).

3. Days 1–2

   Filing on the GST portal

   The LUT is filed online on the GST portal under Services > User Services > Furnish Letter of Undertaking. The form is filled with the exporter's details and digitally signed using the DSC of the authorised signatory.

4. Days 2–3

   Acknowledgement and reference number

   Once submitted, the GST portal issues an ARN (Application Reference Number) and, within 24-48 hours, an acknowledgement confirming the LUT is on record. The LUT is valid from the date of filing until the end of the financial year.

Once the LUT is on record, the exporter moves from the pay-and-refund model to the zero-rated model. A few immediate items follow.

• LUT active on GST portal
  The LUT is active from the filing date and valid until 31 March of the current financial year. The acknowledgement is downloaded and retained; it is required at the time of any refund or scrutiny.
• Zero-rated invoices without IGST
  Export invoices are issued as 'export under LUT' with IGST rate as zero (not exempt, but zero-rated). The tax narration on the invoice references Rule 96A. This is the cash-flow benefit: no IGST paid upfront, no need to claim refund later.
• GSTR-1 export details
  Every export invoice is reported in Table 6A of GSTR-1 for the tax period. The LUT number is quoted where the portal requires it. This links the export to the LUT for the government's tracking of zero-rated supplies.
• GSTR-3B nil IGST on exports
  In GSTR-3B, export supplies are reported under Table 3.1(b) as 'zero-rated supplies with LUT'. IGST payable on these is nil. Input tax credit on inputs used for exports remains fully claimable, which becomes the refund pot for input tax refund applications.
• Input Tax Credit refund claims
  Where input tax credit accumulates on inputs used for zero-rated supplies, refund applications can be filed in Form RFD-01 under Rule 89. The refund route (with LUT) allows recovery of accumulated ITC without any IGST payment being involved in the exports.
• SOFTEX and FEMA reporting
  For IT/ITeS service exports, SOFTEX declarations continue as before. The LUT does not change SOFTEX requirements; it changes only the GST treatment. FEMA reporting through the bank's EDPMS also stays the same.
• Annual renewal calendar set
  The LUT is valid only until 31 March of the current financial year. A new LUT must be filed for the next financial year, ideally before 1 April so the transition is seamless. Missing renewal means paying IGST on exports from 1 April onwards until the new LUT is filed.

GST terminology distinguishes between "zero-rated" and "exempt" supplies. Both look tax-free on the outward side, but the treatment of input tax credit is fundamentally different, which changes the total tax cost.

• Zero-rated supplies (Section 16 IGST Act)

  Exports of goods or services, and supplies to SEZ. Tax rate on the outward supply is 0%. Input tax credit on inputs used for the supply is FULLY claimable. Where credit exceeds output tax (which it always does for pure exporters), it is refundable under Rule 89 or Rule 96.

• Exempt supplies (Section 11 CGST Act)

  Specific goods or services notified as GST-exempt. Tax rate on the outward supply is 0% (or not applicable). But input tax credit on inputs used for exempt supplies is NOT claimable, it is treated as a cost. This is the crucial distinction from zero-rated.

• Why the distinction matters

  An exporter of GST-exempt goods (unlikely, but conceptually possible) cannot claim ITC on inputs. An exporter of standard GST goods with LUT can claim full ITC and get refunds. This makes the LUT-route exporter meaningfully more profitable than the exempt-supply exporter, all other things equal.

The LUT is valid only for the current financial year. This is probably the most operationally important rule to remember.