Export without paying IGST — file your LUT before you invoice
One LUT in Form RFD-11 lets you export goods and services, or supply SEZ units, at zero tax instead of paying IGST and chasing refunds. It expires every financial year — and forgetting the renewal is the most common exporter mistake we fix. We file it, calendar it, and renew it on time.
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Zero-rated, two roads — one of them ties up your cash
Under GST, exports and supplies to SEZ units or developers are zero-rated (Section 16 of the IGST Act). The law gives you two ways to make these supplies:
- Pay IGST on each export invoice, then claim it back as a refund. Your working capital sits with the government until each refund is processed.
- Furnish a Letter of Undertaking (LUT) once, and export without paying IGST at all. No tax outflow, no refund paperwork on the tax amount.
For almost every regular exporter, the second road is the obvious one. The LUT is a simple declaration filed online in Form GST RFD-11, promising that you will meet the export conditions. There is no government fee for furnishing it. The only trap is administrative: it must exist before the zero-tax invoice, and it dies every 31 March.
Not just container exporters — service exporters too
People picture LUTs as something for factories shipping containers from Mundra. In practice, the fastest-growing group who need one looks very different:
- IT companies and software firms billing overseas clients.
- Freelancers and consultants — developers, designers, writers, marketers — invoicing clients abroad through platforms or directly.
- Agencies and BPO/KPO units providing services to foreign customers.
- Merchant and manufacturer exporters of goods, of course.
- Suppliers to SEZ units and SEZ developers, whose supplies are zero-rated even though the goods never leave India.
If you are GST-registered and any of your revenue comes from outside India (or from SEZs), an LUT almost certainly belongs in your compliance calendar. Vadodara has a deep bench of exactly these businesses — engineering exporters, IT service firms, freelancers — and LUT filing is a routine part of the GST work at our Chhani Jakatnaka office.
When you do NOT need an LUT. If you are not registered under GST at all, the LUT question does not arise — and note that inter-state service suppliers enjoy the ₹20-lakh registration exemption, so a small freelancer below that turnover may not need registration in the first place (check our guide on whether you need GST registration). And if you deliberately prefer the pay-IGST-and-refund route — some businesses with accumulated credit do — the LUT is optional, not compulsory. We will tell you which position fits your numbers rather than sell you a filing you do not need.
Who can file, and how long it lasts
Eligibility is deliberately wide: any registered taxpayer can furnish an LUT, with one exception — a person who has been prosecuted for tax evasion involving more than ₹2.5 crore. That person must instead furnish a bond with a bank guarantee. For everyone else, the LUT route is open regardless of size; a first-year freelancer qualifies just as much as a large exporter.
Validity is exactly one financial year. An LUT furnished for FY 2026-27 covers zero-rated supplies from 1 April 2026 to 31 March 2027 and then lapses. It does not renew itself, and the portal will not remind you. A fresh RFD-11 is needed for each financial year — which brings us to the calendar habit that separates smooth exporters from stressed ones.
The 31 March habit
File the next year's LUT before 31 March, so it is already in force when the new financial year opens on 1 April. The GST portal supports this — advance filing for FY 2026-27 was enabled well ahead of April 2026 — so there is no reason to start a year uncovered. New exporters do not have to wait for March; the first LUT can be filed any time, and it covers the remainder of that financial year.
The classic April mistake. Every April we meet exporters who kept invoicing foreign clients at zero tax while their LUT had quietly expired on 31 March. Those gap-period invoices are a genuine problem: without a valid LUT the zero-tax route was not available, and IGST exposure with interest can arise. If this has happened to you, do not paper over it — file the fresh LUT today and get the gap invoices reviewed properly.
When we handle your LUT, the renewal goes into our compliance calendar alongside your monthly return filing — you get a reminder and a filed LUT before March closes, every year.
How the filing works — and what you promise in return
- Details collected. We need your portal access, details of any previous LUT, and the names, occupations and addresses of two independent witnesses.
- Fixed quote confirmed. One professional fee, agreed before we begin. The RFD-11 itself carries no government fee.
- RFD-11 prepared and filed online. The undertaking is submitted on the GST portal and signed off with EVC or DSC by the authorised signatory.
- Acknowledgement delivered. You receive the filed LUT with its reference number — keep it with your export documentation; banks and buyers sometimes ask for it.
- Renewal calendared. We diarise the next 31 March so the LUT never lapses on our watch.
The undertaking is not decorative. By filing it you promise, broadly, that goods will be exported within 3 months of the invoice date, and that payment for exported services will be received (in convertible foreign exchange, per the rules) within 1 year. If a consignment or receivable breaches these conditions, IGST becomes payable on that supply along with 18% interest. Details and current conditions are on the GST portal and in the rules published by CBIC.
What we cannot do. We file and track the LUT; we cannot alter the export conditions attached to it, and we cannot make a late receivable arrive on time. If a condition has already been breached, our role is honest quantification and correct disclosure — not creative paperwork. For end-to-end GST practice for exporters, including LUT, refunds and returns, our specialist site GujaratGST.in is the dedicated home.
What operating without an LUT actually costs
Nothing dramatic happens on the day your LUT lapses — which is exactly why it is dangerous. The costs arrive later, in three forms:
- Cash-flow drag. Without an LUT, the compliant route is paying IGST on every export invoice and claiming refunds afterwards. At 18% on a service invoice, that is nearly a fifth of your revenue cycling through the refund pipeline instead of your bank account.
- Refund workload. Each refund claim is its own mini-proceeding — application, scrutiny, possible query. Multiply by every invoice cycle and the administrative cost dwarfs the ten-minute filing you skipped.
- Retrospective exposure. Zero-tax invoices issued in an uncovered period can crystallise into IGST demands with 18% interest — often discovered during scrutiny, years later, with a notice attached.
Against all of that, an annual RFD-11 filed before March closes is one of the cheapest pieces of insurance in the entire GST system.
The bottom line
The difference between a smooth application and a stuck one is usually preparation, not luck. Preparation is precisely what you are paying us for — and at our prices, it is the cheapest insurance this process offers.
LUT — common questions
What is an LUT in GST?
Who should file an LUT?
Do service exporters and freelancers really need an LUT?
Is everyone eligible to file an LUT?
How long is an LUT valid?
When should I file the LUT for the next financial year?
What happens if I export without a valid LUT?
Is there a government fee for filing an LUT?
What conditions come with exporting under an LUT?
Do I need a separate LUT for each export order?
What details are needed to file RFD-11?
I forgot to renew my LUT and April has started. What now?
Exporting this year? Get the LUT filed this week
Send your GSTIN on WhatsApp and tell us what you export. We confirm eligibility, give a fixed quote, file the RFD-11, and calendar every future renewal.