How to File a Letter of Undertaking (LUT) in Form RFD-11 for Zero-Rated Exports

What does an LUT do?

Exports and supplies to SEZ units are zero-rated under section 16 of the IGST Act. You can either pay IGST and claim a refund, or export under an LUT without paying tax and claim a refund of the unutilised input tax credit. The LUT route avoids blocking working capital in tax, which is why most exporters, especially service exporters, use it.

Who can file?

Any registered person exporting goods or services can furnish an LUT, except a person who has been prosecuted for tax evasion involving ₹250 lakh or more under GST or earlier laws. Such persons must furnish a bond with bank guarantee instead. The LUT is filed for each financial year, so file the next year's LUT before 1 April or before the first export of the year.

Documents and details

The form is filed online and acknowledged immediately, but keep supporting documents ready in case the jurisdictional officer asks for them. Two independent witnesses must be named with their addresses and occupations.

• GSTIN and authorised signatory details
• Names, addresses and occupations of two witnesses
• IEC (for exports of goods)
• Board resolution or authorisation for the signatory
• DSC or EVC for signing
• Previous LUT details, if any

Conditions under Rule 96A

By furnishing the LUT you undertake to export goods within three months of the invoice date, or a longer period allowed by the Commissioner, and to receive payment for exported services in convertible foreign exchange or in Indian rupees where RBI permits, within one year of the invoice. If you miss these limits, you must pay the IGST with interest within 15 days. Failure to pay can lead to withdrawal of the LUT facility until the dues are cleared.

Invoicing under LUT

Export invoices under LUT must carry an endorsement such as 'Supply meant for export under LUT without payment of integrated tax' and show the LUT reference number. Report these invoices in GSTR-1 as exports without payment of tax. For goods, the shipping bill should reflect the LUT. Keep foreign inward remittance proof for service exports to support refund claims.

LUT or bond: which applies?

Filing an LUT takes minutes and the acknowledgement is generated instantly. Most exporters qualify for the LUT. A bond, backed by a bank guarantee covering the estimated tax liability, is required only from persons excluded from the LUT facility because of prosecution for large tax evasion. The bond route ties up bank limits and is filed through the jurisdictional officer, so check eligibility before planning shipments.

Common mistakes

Forgetting to renew the LUT at the start of the year, charging IGST on export invoices despite the LUT, missing the LUT reference on invoices and not tracking the one-year deadline for service payments are frequent problems. If an export happens before the LUT is filed, IGST is technically payable on it.

Step by step

1. 1Log in

   Open the GST portal and go to Services, User Services.

2. 2Select RFD-11

   Choose 'Furnish Letter of Undertaking (LUT)'.

3. 3Pick the year

   Select the financial year for which LUT is filed.

4. 4Give previous LUT

   Enter details of earlier LUTs, if any.

5. 5Tick declarations

   Accept the undertakings in the form.

6. 6Add witnesses

   Enter names, addresses and occupations of two witnesses.

7. 7Sign and submit

   Sign with DSC or EVC and download the ARN acknowledgement.