LUT under GST: exporting without paying IGST
A Letter of Undertaking (LUT) lets exporters and SEZ suppliers make zero-rated supplies without paying IGST. It is filed in RFD-11 every year.
Short answer
A Letter of Undertaking (LUT) is a declaration filed on the GST portal in Form GST RFD-11 that allows a registered exporter, or a supplier to an SEZ, to make zero-rated supplies without paying IGST. An LUT is valid for one financial year and must be renewed each year before exports begin.
- Form
- GST RFD-11
- Validity
- One financial year
- Who can file
- Registered persons not prosecuted for tax evasion above ₹2.5 crore
- Alternative
- Export on payment of IGST and claim refund
How the LUT works
The exporter files Form RFD-11 online, declaring that it will export the goods within three months of the invoice date and, for services, receive payment in convertible foreign exchange or Indian rupees where permitted, within one year or the period allowed. The LUT is deemed accepted on filing, and the acknowledgement reference number is quoted on export invoices with the endorsement that the supply is meant for export under LUT without payment of IGST. If the conditions are not met, the exporter must pay IGST with interest.
LUT versus paying IGST
Exporters can choose between two routes for zero-rated supplies. Under LUT, no IGST is paid and the exporter claims a refund of accumulated input tax credit if needed. Under the other route, the exporter pays IGST on the export and claims a refund of that tax. The LUT route avoids blocking cash in IGST, which is why most service exporters prefer it.
Why it matters for startups
IT and SaaS startups selling to foreign clients usually qualify as exporters of services. File the LUT at the start of each financial year, before the first export invoice, and track payment realisation for each invoice. Missing the renewal can make exports taxable at the time of invoice, with interest if not paid.
Related services
Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is LUT required every year?
Yes. An LUT is valid for the financial year for which it is filed and must be furnished again for the next year.
Can I export services without an LUT?
Yes, but you must then pay IGST on the export and claim a refund, which blocks working capital.
Who cannot file an LUT?
Persons prosecuted for tax evasion involving more than ₹2.5 crore under GST or earlier laws are not eligible and must furnish a bond instead.