A Letter of Undertaking (LUT) in GST is a declaration filed on Form GST RFD-11 that lets a GST-registered exporter supply goods or services abroad without paying Integrated GST (IGST) upfront.
Exports are treated as zero-rated supply under Section 16 of the IGST Act, so an LUT keeps that tax off your invoice instead of forcing you to pay it and claim a refund later.
In brief:
- Full form: LUT is short for Letter of Undertaking. There is nothing more to the acronym, which is why the term and its full form are often searched together.
- Purpose: export without paying IGST, and without blocking working capital in a refund cycle.
- Form: GST RFD-11, filed online on the GST portal.
- Validity: one financial year, 1 April to 31 March. You renew it every year.
The rest of this guide covers who can file, the exact online steps, what the form contains, and the one condition most service exporters overlook: realising your export payment in foreign currency within a year.
Why do exporters file an LUT?
Without an LUT, you have two options on every export invoice, and only one protects your cash.
You either pay IGST on the export and claim it back as a refund, or you file an LUT and skip the payment entirely.
The refund route sounds harmless until you see the numbers. Take a ₹10,00,000 software-services invoice: 18% IGST is ₹1,80,000. That money leaves your account on filing and returns only after the refund is processed, which commonly takes several months.
For a services business billing monthly, that is working capital sitting idle. An LUT removes the block. You bill the client at zero IGST, keep the ₹1,80,000, and stay fully compliant.
This is why the export of services under GST is almost always run under an LUT. If you want the two routes weighed against each other, see export of services under GST and LUT vs IGST refund.
Who is eligible to file an LUT under GST?
Almost every exporter qualifies. Under Rule 96A of the CGST Rules, the LUT facility is open to any registered person making zero-rated supplies, with one exclusion: anyone prosecuted for tax evasion of ₹2.5 crore or more cannot use it.
To file, you need to be:
- GST-registered, with a valid GSTIN. Export of services is taxable at 0% under an LUT, but the supply is not exempt, so registration is what makes the facility available to you.
- Making zero-rated supplies, meaning exports of goods or services, or supplies to a Special Economic Zone (SEZ).
- Clear of serious prosecution, specifically the ₹2.5 crore tax-evasion bar above.
If you are barred from an LUT, the fallback is a bond, covered further down.
One point trips up solo service providers, including many STPI software exports units: the ₹20 lakh registration threshold does not exempt you once you want to export under an LUT. You register first, then file.
What documents do you need for LUT filing?
The list is short because the process is self-declared.
- Your GSTIN and business details as they appear on the portal.
- The previous year's LUT (a PDF or JPEG under 2MB) if you are renewing.
- An authorised signatory with a working digital signature certificate (DSC) for companies and LLPs, or access to file by Electronic Verification Code (EVC) for proprietors and partnerships.
- Two independent witnesses, each with name, occupation and address.
How do you file an LUT online on the GST portal?
The whole thing takes about ten minutes and costs nothing. As of July 2026, the steps on the GST portal are:
Step 1: Log in to the GST portal
Log in to the GST portal with your username and password.
Step 2: Go to Furnish Letter of Undertaking (LUT)
Go to Services > User Services > Furnish Letter of Undertaking (LUT).
Step 3: Select the financial year
Select the financial year for which you are filing.
Step 4: Upload the previous year's LUT (optional)
Upload the previous year's LUT if you are renewing (optional, but useful).
Step 5: Tick the three self-declaration checkboxes
Tick the three self-declaration checkboxes on completing exports, receiving payment on time, and paying IGST with interest if you do not.
Step 6: Enter the two witnesses' details
Enter the two witnesses' details.
Step 7: Sign and submit using DSC or EVC
Sign and submit using DSC (companies and LLPs) or EVC (others).
On submission, the portal generates an Application Reference Number (ARN) and the LUT is deemed accepted. There is no manual approval wait.
What does the LUT form (RFD-11) contain?
Form GST RFD-11 is a single declaration. Knowing what each field wants saves a re-file.
| Field | What to enter | Common mistake |
|---|---|---|
| GSTIN | Your 15-digit GST number | Entering PAN or TAN instead |
| Financial year | For example, 2026-27 | Selecting the wrong or prior year |
| Place of filing | City of your principal place of business | Entering a shipment port or client location |
| Authorised signatory | Proprietor, MD, or working partner | Naming someone without signing authority |
| Witnesses (two) | Full name, occupation, address | Missing an address or reusing one person |
| Declarations | All three boxes ticked | Leaving one unticked |
The "place of filing" trips people up most. It is your registered business city, not where the goods ship from or where the client sits. If your exports involve customs paperwork, keep it consistent with your export declartion form.
What is the LUT number and where do you use it?
The ARN generated on submission is, in practice, your LUT number. You quote it on export documents to show the supply is zero-rated under a valid undertaking.
Put the LUT number and a short line such as "Supply meant for export under LUT without payment of IGST" on every export invoice you raise for the year.
This is a step freelancers on tax forums repeatedly forget, then scramble to fix at return-filing time.
The zero-rated supply then flows into your GSTR-1 for export of services return, reported without any tax liability.
The condition most service exporters miss: getting paid within a year
Here is the part the tax-filing guides skip. An LUT is a promise, and one clause of that promise is about money arriving, not just leaving.
Under Rule 96A, when you export services under an LUT you undertake to receive payment in convertible foreign exchange, or in rupees where the RBI permits, within one year of the invoice date.
Worked through: an invoice dated 12 April 2026 must be realised by 11 April 2027.
Miss that window and the zero-rating collapses. You become liable to pay the IGST you avoided, plus 18% interest, within 15 days.
The LUT protected your cash on the way out, but only realisation on the way in keeps it protected.
This is where the payment layer stops being an afterthought. Proof the money came in is your Foreign Inward Remittance Advice, and an eFIRA ties each foreign receipt to the export invoice it settles.
That same document is the evidence you rely on for a FIRC for GST refund on your input tax credit. If you are unsure which document does what, FIRC vs FIRA explains the difference.
What happens if you export without a valid LUT?
This is the most-upvoted anxiety on Indian tax forums. One recurring thread describes an exporter who discovers, months in, that their LUT quietly lapsed on 1 April and several zero-rated invoices went out uncovered. The honest answer has three parts.
First, you cannot file an LUT with backdated effect. A fresh LUT applies from its filing date forward, so exports made while it had lapsed are not retrospectively covered.
Second, for those uncovered exports the department can treat the supply as taxable. IGST becomes payable, and you claim it back through the refund route.
In practice, if payment was still realised in foreign exchange within the year, many practitioners regularise the gap by paying the tax with interest and documenting the realisation and repatriation of export proceeds.
Third, the real trigger is a show-cause notice. If the department raises one, you respond with your GST returns, invoices and remittance proof.
Filing your renewal on time keeps this off your desk entirely. Where a large past exposure is involved, take it to a chartered accountant rather than self-assess.
LUT vs bond: which applies to you?
If you clear the eligibility bar, you file an LUT. The bond is the fallback for the small group that does not.
| Aspect | LUT | Bond |
|---|---|---|
| Who uses it | Eligible exporters | Those barred from an LUT |
| Cost | Free, no guarantee | Bank guarantee, up to 15% of the bond amount |
| Validity | One financial year | Until covered exports are completed |
| Process | Form RFD-11, online, ARN on filing | Manual submission and verification |
| Turnaround | Deemed accepted on filing | Multi-week review |
For most GST-registered service exporters, the bond never enters the picture.
When do you renew your LUT? The annual 31 March cycle
An LUT covers one financial year and expires with it, which is why search interest and last-minute filings spike every February and March. Treat renewal as a fixed annual task, not a reminder you wait for.
| Date | What it means | Action |
|---|---|---|
| 1 February 2026 | Renewal window effectively open | Gather documents |
| 1 March 2026 | Recommended filing point | File early, avoid portal congestion |
| 31 March 2026 | Practical cut-off | Have the new LUT in force |
| 1 April 2026 | FY 2026-27 begins | First export needs an active LUT |
A lapsed LUT is the single most common compliance gap for exporters, and a March filing avoids it. For the wider picture, see this Xflow compliance overview.
Common mistakes while filing an LUT
- Forgetting the annual renewal: The LUT does not roll over. File a fresh one each financial year before you export.
- Wrong "place of filing": Use your principal business city, not a port or a client address.
- Incomplete witness details: Two independent witnesses, each with a full address.
- Not quoting the LUT number on invoices: Reference it on every export invoice for the year.
- Ignoring the realisation clock: Track that foreign payment lands within one year, or the benefit reverses.
How the payment layer fits your LUT compliance
An LUT handles the tax side of exporting. The other half, receiving the money and proving it arrived, is where a cross-border payments platform earns its place.
Xflow gives Indian service exporters receiving accounts in the client's currency, with settlement to your Indian account on a next-business-day (T+1) basis. Live mid-market exchange rates avoid the FX markup banks build into their own rate.
Auto-issued eFIRA closes the documentation loop the LUT depends on, so the same foreign inward remittance that pays your invoice also proves realisation. Free Xflow Invoicing keeps the LUT declaration line on every bill you raise.
As an RBI-authorised Payment Aggregator - Cross Border (PA-CB) for exports and imports, as of February 2026, the chain from RBI purpose code for inward remittance to realisation stays intact.
The GST on foreign exchange treatment on your conversions is unchanged either way.
The LUT keeps IGST off your export invoice. Reliable, well-documented inward payment is what keeps that benefit yours.
Better rate. Better platform. Better choice.
Frequently asked questions
LUT stands for Letter of Undertaking. It is a declaration on Form GST RFD-11 that lets a GST-registered exporter supply goods or services without paying IGST upfront, since exports are zero-rated.
Yes. An LUT is valid for one financial year, 1 April to 31 March. You must file a fresh RFD-11 each year, ideally before 31 March, so your first export of the new year is covered.
It is mandatory only if you want to export without paying IGST. Without an LUT you must pay IGST and claim a refund. Most service exporters file an LUT to avoid blocking working capital.
About ten minutes. Filing on the GST portal generates an ARN immediately and the LUT is deemed accepted, with no manual approval wait and no fee.
Exports made without a valid LUT are treated as taxable, so IGST becomes payable and you claim it back via refund. A fresh LUT applies prospectively, not retrospectively, so file on time.
Anyone prosecuted for tax evasion of ₹2.5 crore or more cannot file an LUT. They must instead furnish a bond backed by a bank guarantee to export without paying IGST.
An LUT is free, filed online, and accepted on submission. A bond is for exporters barred from an LUT, requires a bank guarantee of up to 15%, and goes through manual verification.
Yes. Under Rule 96A you must realise payment in convertible foreign exchange within one year of the invoice. If you do not, you owe the IGST plus 18% interest, so track realisation closely.
