How to File LUT for Exports Under GST: Step-by-Step

If you export goods or services, learning how to file LUT for exports under GST can free up significant working capital. Exports and supplies to SEZ units are zero-rated: you can either pay IGST and claim a refund, or export without paying IGST under a Letter of Undertaking (LUT) and claim a refund only of the unused input tax credit. Filing an LUT in Form GST RFD-11 is free, done online and valid for a full financial year. This guide covers eligibility, the portal steps, invoice requirements, the refund formula with a worked example, and the conditions you must meet after exporting.

Two ways to make zero-rated supplies

Option	How it works	Cash impact
Export with payment of IGST	Charge IGST on the export invoice, pay it (often using ITC), then claim refund of the IGST paid	Tax is paid upfront and recovered later
Export under LUT without payment of IGST	No IGST on the export invoice; claim refund of accumulated ITC used for exports	No upfront tax outflow on exports

For goods exported with payment of IGST, the shipping bill itself is generally treated as the refund application, and refunds can be quick if data matches. For services and for SEZ supplies, both routes need a refund application. Many exporters, particularly service exporters, prefer the LUT route because it avoids blocking cash in tax.

Who can file an LUT

Any registered person exporting goods or services, or supplying to SEZ units or developers, can file an LUT, unless the person has been prosecuted for tax evasion above a specified amount under GST or earlier tax laws. Persons not eligible for LUT must furnish a bond with a bank guarantee instead. Deemed exports are not covered by LUT; they follow separate rules.

Information you need

• GSTIN and portal login with the authorised signatory's DSC or EVC.
• Financial year for which the LUT is being filed.
• Details of two independent witnesses: name, address and occupation.
• Name and designation of the authorised signatory.
• Previous LUT reference, if you are renewing.

How to file LUT on the GST portal: step by step

1. Log in to the GST portal and go to Services, User Services, Furnish Letter of Undertaking (LUT).
2. Select the financial year for which you are filing.
3. If you filed an LUT on paper earlier, upload it where prompted; otherwise skip.
4. Tick the three self-declaration checkboxes: that you will export within the prescribed time, comply with the rules and pay tax with interest if you fail.
5. Enter details of two independent witnesses.
6. Enter the place and date, and select the authorised signatory.
7. Click Save, then Preview to check the form.
8. Sign and file with DSC or EVC. An ARN is generated immediately.
9. Download the filed LUT. The ARN acknowledgement serves as the accepted LUT; no separate approval letter is needed.

File the LUT before the first export of the financial year, ideally in March for the coming year or on 1 April. If an export happens before the LUT is filed, the safer approach is to charge IGST on that invoice. Delays in filing have been condoned in some cases, but do not rely on it.

Invoice requirements for exports under LUT

• Endorsement: "Supply meant for export under bond or letter of undertaking without payment of integrated tax" (or the SEZ equivalent).
• Name and address of the recipient, address of delivery and name of the country of destination.
• For goods, port code and shipping bill number and date when available.
• Currency of invoice and exchange rate where invoiced in foreign currency.
• LUT ARN reference is commonly printed for clarity.
• For businesses covered by e-invoicing, export invoices need an IRN.

Place of supply and the export classification rules are explained in our guide to place of supply under GST.

Conditions after exporting

Type	Condition	If not met
Goods	Export within three months of the invoice date (extendable by the officer)	Pay IGST with interest
Services	Receive payment in convertible foreign exchange, or in Indian rupees where permitted by RBI, within one year of the invoice date (or as extended)	Pay IGST with interest

For services to qualify as exports, five conditions must all hold: the supplier is in India, the recipient is outside India, the place of supply is outside India, payment is received in foreign exchange (or INR where RBI permits), and the supplier and recipient are not merely establishments of the same person.

Refund of unused ITC: formula and worked example

Under the LUT route, exporters accumulate ITC because their export sales generate no output tax. Rule 89(4) allows refund of this credit using a formula:

Refund amount = (Turnover of zero-rated supply of goods and services x Net ITC) / Adjusted total turnover

Example

A Pune software exporter has these figures for a quarter:

Item	Amount
Export of services under LUT (payment received)	₹60,00,000
Domestic taxable supplies	₹40,00,000
Adjusted total turnover	₹1,00,00,000
Net ITC on inputs and input services for the period	₹5,00,000

Refund = ₹60,00,000 x ₹5,00,000 / ₹1,00,00,000 = ₹3,00,000. The refund is capped at the balance in the electronic credit ledger at the time of filing and the lowest balance in the period, as per the portal's validations. The remaining ₹2,00,000 of credit stays for use against domestic output tax. Note that ITC on capital goods is excluded from "Net ITC" for this formula.

Filing the refund claim

1. Go to Services, Refunds, Application for Refund.
2. Choose "Export of services with payment of tax", "Export of goods or services without payment of tax (accumulated ITC)" or the SEZ equivalent as applicable.
3. Select the period. Claims can cover one or more consecutive periods within a financial year.
4. Upload a statement of invoices with export details and, for services, foreign inward remittance details (BRC or FIRC).
5. Fill the formula figures; the portal computes the eligible amount.
6. File with DSC or EVC. The amount is debited from the credit ledger and an ARN is generated.
7. Track status. The officer issues an acknowledgement, may issue a deficiency memo, and then a provisional or final order.

Refund claims must be filed within two years from the relevant date (for services, generally the date of receipt of payment). Track these dates carefully.

Reporting LUT exports in your returns

Exports under LUT must be reported correctly so the refund claim and the returns agree.

• GSTR-1: report in Table 6A as exports "WOPAY" (without payment of tax), with port code and shipping bill details for goods. Supplies to SEZ without payment go in Table 6B as "SEZWOP".
• GSTR-3B: report the taxable value in Table 3.1(b), zero-rated supplies, with tax shown as zero.
• Refund application: the turnover of zero-rated supply used in the formula must match GSTR-1 and GSTR-3B for the period. For services, it is the value of exports for which payment has been received in the period, which may differ from invoices raised.

Worked example: GSTR-3B for a mixed exporter

The Pune exporter in the example above invoices ₹20,00,000 of services to foreign clients in a month under LUT and ₹15,00,000 to Indian clients at 18% IGST. Table 3.1(a) shows taxable value ₹15,00,000 with IGST ₹2,70,000. Table 3.1(b) shows ₹20,00,000 with zero tax. If eligible ITC for the month is ₹1,80,000, the exporter uses it against the ₹2,70,000 IGST liability and pays ₹90,000 in cash. When ITC exceeds domestic liability in some months, the excess accumulates and becomes eligible for refund under the formula.

Common LUT and export mistakes

• Forgetting to renew the LUT for the new financial year and exporting without it.
• Missing the endorsement on export invoices.
• Reporting LUT exports in GSTR-3B Table 3.1(c) instead of 3.1(b), or in GSTR-1 under the wrong export type.
• Not tracking the one-year payment realisation window for services.
• Including capital goods ITC in net ITC for the refund formula.
• Exporting through a related overseas office where the "distinct person" condition fails.

LUT and export compliance checklist

1. LUT filed for the current financial year; ARN saved.
2. Export invoices carry the LUT endorsement and destination details.
3. Export invoices registered on the IRP if e-invoicing applies.
4. Shipping bill and EGM details matched with GSTR-1 for goods.
5. Foreign remittance documents collected for services.
6. Outstanding export receivables tracked against the one-year window.
7. Refund claims filed periodically within the two-year limit.

How Fininvo helps

Fininvo ERP issues export invoices in foreign currency, with exchange rate conversion and the INR equivalent calculated for GST and accounting, and tracks foreign currency receivables. Its ITC ledger shows credit available and utilised, which supports refund computations. See invoicing, tax compliance and pricing.

General information, not tax advice. Export and refund rules involve FEMA and customs aspects; consult your CA.

Frequently Asked Questions

Is there a fee to file an LUT?

No. LUT filing on the GST portal is free and generates an ARN immediately.

How long is an LUT valid?

An LUT is valid for the financial year for which it is filed. File a fresh one each year, ideally before 1 April.

Do I need an LUT for supplies to an SEZ unit?

Yes, if you want to supply to an SEZ unit or developer without paying IGST. The supply must be for authorised operations of the SEZ.

Can freelancers exporting services file an LUT?

Yes, if they are registered under GST. Freelancers below the registration threshold who export services are generally not required to register solely for exports, but those who are registered should file an LUT to avoid paying IGST.

What if payment for an export of service is not received within a year?

The supply may not qualify as an export, and IGST with interest becomes payable, unless the period is extended or the RBI permits otherwise. Track receivables closely.