Introduction
LUT in GST stands for Letter of Undertaking, which is filed by GST-registered exporters using Form GST RFD-11. GST LUT is a formal document that is utilized by registered exporters who ship goods or provide services out of India or to a Special Economic Zone (SEZ). Through it, the registered taxpayers export without paying integrated GST (IGST) upfront, with no blockage of funds or government tax deposit for months, and it offers higher liquidity. Every GST-registered taxpayer can apply for a LUT (Letter of Undertaking) if they wish to make a "zero-rated supply" without paying the integrated GST (IGST) upfront.
A Comprehensive Check-Box
- LUT (Letter of Undertaking) is a legal declaration filed by exporters in India. LUT is filed via form GST RFD-11 on the GST portal.
- There is no requirement for a bank guarantee or physical collateral. The exporters generally avoid locking up 18% of their total invoice value in upfront tax payments.
- LUT (Letter of Undertaking) is valid only for one year (April 1 to March 31). Once the financial year ends, the exporters are required to file a new LUT on the GST portal as it is non-renewable.
- The exporters must receive the payment in foreign currency for services within 1 year of filing the LUT on the GST portal and for goods not exported within three months from the invoice date without paying IGST.
- Failure to receive the payment in foreign currency within the prescribed timeline results in paying the mandatory IGST along with 18% p.a interest.
- Anyone who is operating without a valid GST registration certificate cannot file a LUT; even a default on export timelines restricts to apply for a Letter of Undertaking. If any taxpayer has been prosecuted for tax evasion exceeding ₹2.5 crore, they cannot file a LUT.
What is LUT Under GST?
LUT stands for 'Letter of Undertaking' under GST, which acts as a formal declaration. It is governed under Rule 96A of the CGST Rules, 2017, and is valid only for one financial year. Under Section 16 of the IGST Act, exports of goods/services and supplies to Special Economic Zones (SEZ) are classified as “zero-rated supplies”. GST LUT is filed by the registered exporter via Form GST RFD-11 on the GST portal. Once LUT is filed, the exporter gets relief from being blocked in the long tax refund cycle. If the Letter of Undertaking is not filed on the portal before goods or services are exported, it means they are legally required to pay the full integrated GST (IGST) upfront.
Who Can File LUT under GST?
LUT (Letter of Undertaking) must be filed by any GST registered person who intends to make zero-rated supplies (exports or SEZ supplies) without paying the integrated GST (IGST) upfront. These are the parties who can file a LUT in GST:
- Sole proprietors and freelancers with GST registration
- Companies and firms provides services
- Partnership firms & LLPs can apply
- Private limited companies and public limited companies
- One Person Company (OPCs)
- Businesses shipping manufactured goods out of India
- Traders buy goods from domestic markets and export abroad
- Taxpayers providing goods or services to a Special Economic Zone (SEZ) within India
Note: There is no minimum or maximum turnover limit to file a LUT in GST, as it is filed regardless of business size.
Who Cannot File LUT?
File LUT on the GST portal is applicable for all registered exporters, but still GST LUT filing is prohibited or restricted for specific individuals or companies under GST laws.
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Taxpayers Charged for Major Tax Evasion
If any exporter has been legally charged by GST authorities or has been legally taken to court for stealing the ₹2.5 crore (or ₹250 lakh) in taxes in the past year, then the exporter loses the right to apply for LUT in GST.
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Unregistered GST Exporters
If any exporter does not hold a valid GST registration (GSTIN), then it cannot leverage it for the LUT (Letter of Undertaking) filing. Even without GST, you cannot export goods or services as it is required for the tax formalities.
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Taxpayer Restricted by GST Officer
The GST processing officer has legal rights to restrict the LUT filing functionality for a specific taxpayer who is not compliant with tax rules and regulations. It fails to apply for LUT under GST and will remain the same until the same officer unrestrict it manually.
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Failure to Meet the LUT Timeline
The authority oftens revoked or suspends the LUT facility if the taxpayers fail to comply with the statutory realization condition after filing the first LUT (Letter of Undertaking) on the GST portal. If goods are not exported within 3 months of filing the LUT from the date of invoice, then the authority stops the facility. Even rules are strict for services related to foreign currency transactions.
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Exporters Managing Domestic Transactions
If any exporter is supplying goods or services within India that come under the non-zero-rated category, then they cannot file for LUT under GST. This is because LUT is only applicable for the zero-rated supplies (export of goods or services outside of India or to SEZ units/developers).
What Are the Benefits of Filing the LUT?
Filing the Letter of Undertaking (LUT) on the GST portal offers various financial, administrative, and operational benefits to the taxpayers who export goods or make sales in SEZ (Special Economic Zone). These are the core benefits you are associated with LUT filing:
- Prevents fund blocking: With a valid LUT (Letter of Undertaking) filing, exporters get access to not pay the IGST at the time of shipment. In this situation, they do not need to wait for refunds for a longer time.
- Reinvestment of Working Capital: The LUT (Letter of Undertaking) provides benefits to exporters to utilize the working capital in inventory or manufacturing operations.
- Avoids Hurdles of Refund Mechanism: LUT under GST allows exporters to go through the refund mechanism. You do not need to manage the heavy documentation and other statutory formalities to claim IGST refund.
- Valid for One Financial Year: The Letter of Undertaking (LUT) is valid for the full financial year (April 1 to March 31).
- No Bank Guarantee Requirement: With GST LUT, the exporters don’t need to take a bank guarantee as in “Export Bond accompanied by a bank guarantee.
How to File the Form RFD-11 on GST Portal?
LUT Filing is completely online on the GST portal and paperless. No physical papers are required to upload, but they must be prepared for any inspection and for audit. Follow this step-by-step guide to file the LUT (Letter of Undertaking) on the GST portal:
Step 1: Log in to the GST Portal
Visit the GST portal www.gst.gov.in and log in using your login credentials by entering your GSTIN username and password.
Step 2: Navigate the LUT Filing Page
After login your ID on the GST portal, you have to visit the section of “Services”, and then user services. On the dashboard, you see the option of “Furnish Letter of Undertaking (LUT)”.
Step 3: Select the Financial Year
Once you navigate the LUT filing page, your next step is to select the financial year from the “LUT applied for Financial Year”.
Step 4: Read & Tick Self Declarations
To utilize the LUT benefits, you have to agree with three major declarations which are listed during processing. The three declarations include:
- 1. The exporter must export the goods within 3 months from the date of invoice.
- 2. The exporter must realize the foreign currency within 1 year from the invoice date.
- 3. The exporter must pay the IGST along with 18% p.a interest if failed to comply with the 1st and 2nd conditions.
Step 5: Mention Witness Information
Must mention the details of two witnesses under the independent witness section. In the sections, you have to mention their name, address, and occupation. Ensure that the details mentioned about the two witnesses are accurate before proceeding.
Step 6: Download ARN (Application Reference Number)
Upon application submission and other formalities, the portal will generate an ARN (Application Reference Number), which you can use to download the acknowledgement copy for customs and record-keeping.
LUT vs Bond vs Paying IGST: Core Difference
An export company or individual’s compliance history, working capital needs, and business model determine which mechanism you are required to select under GST LUT Filing (Letter of Undertaking).
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Letter of Undertaking (LUT) Validity and Renewal
The LUT under GST is generally valid for one financial year ( 1st April to 31st March ), regardless of the date it is applied. The validity is strictly tied to the prescribed financial year deadline.
- Start Date: LUT filing date on GST portal
- Expiry Date: 31st March of the financial year
What is the renewal deadline?
Well, there is no separate “renewal” button or extension feature on the GST portal for the LUT (Letter of Undertaking). This is because the LUT is not renewed; instead, registered exporters are required to apply for a fresh RFD-11 form on the GST portal.
For example, Ashoke is a freelancer who exports handmade crafts to the UK. He applied for LUT on the GST portal on 21st September, 2026. Then, its LUT will expire on 31st March, 2027 (valid only in the financial year 1st April to 31st March).
Winding Up
LUT under GST is a gateway to avoid the waiting period of months for a refund. By filing a LUT (Letter of Undertaking) on the GST portal, the registered exporters get the privilege to utilize the benefits. The exporters can supply the Goods or services in another country or SEZ without paying the Integrated Goods and Services Tax (IGST) and can avoid waiting for a refund. It significantly avoids the blockage of working capital, makes customs supply faster and smoother without getting stuck in complex tax formalities.
Working alone to align with GST formalities can be daunting for busy exporters, but here JustStart helps to oversee documentation, portal filing, and annual renewal reminders so the reader doesn't have to track deadlines.
Frequently Asked Questions (FAQs)
Q1. Is LUT mandatory for all exporters?
Ans. No, filing the Letter of Undertaking (LUT) is not mandatory for every exporter. But it is highly recommended when exporters want to export goods or services without paying the integrated IGST upfront.
Q2. Who needs to file the LUT under GST?
Ans. LUT is filed by any GST-registered exporter whom intend to export goods or services to another country or supply goods or services to a Special Economic Zone (SEZ) or developer without paying the integrated IGST upfront.
Q3. Can freelancers and small service exporters file the LUT?
Ans. Yes, freelancers and small service exporters can file the LUT, but having valid GST registration (GSTIN) for freelancers is mandatory. GST LUT is filed via the GST RFD-11 form on the GST portal.
Q4. What is the validity of LUT under GST?
Ans. The LUT in GST is typically valid for one financial year (April 1 to March 31st). The exporters are required to apply for a fresh LUT on the GST portal via the form GST RFD-11.
Q5. What is the cost to file the LUT on the GST portal?
Ans. There are no official government fees to file the LUT on the GST portal. However, the cost is generally associated with a consultant if you take one to streamline the filing process. The cost can range from ₹500 to ₹3,999 (depending on service range and company).
Q6. How to file the LUT (Letter of Undertaking) online?
Ans. The LUT filing process is free and online on the GST portal. To file LUT Application on the GST portal, you have to first log in to the portal by entering your GSTIN and password, open the form, choose the financial year, fill the details, sign (by using DSC or EVC), and submit.
Q7. What if I failed to file the LUT before exporting goods?
Ans. Failure to file the LUT before exporting goods means you are liable to pay the Integrated Goods and Services Tax (IGST) upfront and wait for a month to claim a refund. Not filing the LUT on time triggers the blocking of working capital.
Q8. Can the LUT be renewed?
Ans. No, LUT (Letter of Undertaking) cannot be renewed, as there is no LUT renewal or extension option available on the GST portal. Once it expires (last expiry date 31st March), the GST -registered exporter is required to file the new GST RFD-11 on the GST portal.
Q9. Can I file LUT myself on the GST portal?
Ans. Yes, you can do GST LUT Filing yourself on the GST portal by using the RFD-11 form. The filing process is straightforward and completely online.
Q10. What are the consequences of non-compliance with LUT GST?
Ans. Non-compliance with GST LUT raises several consequences. The exporters treated as regular taxpayers are forced to pay the IGST with interest, inclduing, blocked of working capital and revocation of LUT privileges.
