Letter of Undertaking (LUT) Under GST: A Guide for Exporters

A Letter of Undertaking (LUT) is one of the most important documents for GST-registered exporters in India because it allows them to export goods and services without paying Integrated GST (IGST) upfront. Instead of locking up working capital in a tax payment and waiting for a refund, exporters can file an LUT once every financial year and continue making zero-rated supplies seamlessly.

Note on currency: GST procedures and thresholds are revised periodically, and the GST portal's filing steps can change. The guidance below explains how the LUT works; always confirm the current process and conditions on the official GST portal or with a tax advisor before filing.

What is a Letter of Undertaking (LUT)?

For an exporter, cash flow is everything, and few things tie it up like paying tax on a sale you then have to chase a refund for. The Letter of Undertaking is the mechanism that lets you skip that cycle entirely.

Under the GST regime, exports are zero-rated, but by default an exporter either pays IGST (Integrated Goods and Services Tax) and later claims a refund, or exports without paying IGST by furnishing an LUT. An LUT (Letter of Undertaking) is a declaration, filed on the GST portal, in which the exporter commits to meeting the conditions for zero-rated export. In return, it spares you the effort of pursuing a refund and avoids blocking your funds in tax payments in the first place.

In short: with an LUT, you export IGST-free and keep your working capital free. Without one, your money stays locked in a refund queue. That is why filing an LUT is one of the first steps for any registered exporter.

Who is eligible for an LUT?

Under the CGST Rules, 2017, any registered person can furnish an LUT in Form GST RFD-11 and export goods or services without paying integrated tax, provided they meet the conditions:

• GST registration. You must be a registered taxpayer under GST.
• Engaged in export. The facility is for exporters of goods or services (and for supplies to SEZ units and developers, which are also zero-rated).
• A clean compliance record. You should have no pending tax liabilities or arrears and a satisfactory track record, including timely filing of GST returns.

One important disqualifier to note: an exporter who has been prosecuted for tax evasion above the prescribed threshold is generally not eligible to furnish an LUT and must instead export under a bond with a bank guarantee. Confirm your eligibility before assuming the LUT route is open to you.

Documents required to file an LUT

The GST portal generally does not require document uploads at the time of filing, but you should have the following ready for the form and for any verification:

• PAN card of the export business.
• IEC (Importer Exporter Code) certificate.
• GST registration certificate.
• Two witnesses with their address proof and PAN.
• Cancelled cheque of the exporter's current account.
• The GST RFD-11 form.
• KYC of the authorised person.
• An authorisation letter for the signatory.

Having these on hand makes the online filing quick and avoids hold-ups if the authorities seek verification.

How to apply for an LUT

Filing an LUT is a free, fully online process on the GST portal. The steps:

1. Log in to the GST portal.
2. Navigate to the "Services" tab, click "User Services," and select "Furnish Letter of Undertaking (LUT)."
3. Choose the financial year for which you are applying from the "LUT Applied for Financial Year" dropdown.
4. Fill in the form (GST RFD-11) and complete the self-declaration by ticking each box.
5. Enter the place of filing, save, and preview to check the form before submitting.
6. Sign and file using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).

After submission, a confirmation appears and the portal sends an ARN (Application Reference Number) to your registered email and mobile. You can download the acknowledgement for your records. Because the portal's steps can change, follow the latest instructions on the official GST portal.

LUT validity and renewal

An LUT is valid for one financial year, from the date of submission up to 31 March of that year. It does not renew automatically.

For example, an LUT furnished during FY 2024-25 expires on 31 March 2025, so you must file a fresh LUT for FY 2025-26 to keep exporting without IGST. The practical rule most experienced exporters follow: file the new LUT in March, before the financial year turns, so there is no gap.

If you fail to renew before expiry, you lose zero-rated status on new exports. Any export invoice raised after 1 April without a valid LUT can attract IGST (with interest) until you file the new one, which is exactly the working-capital block the LUT exists to avoid.

The condition exporters overlook

The LUT is not a one-and-done formality; it comes with an ongoing obligation that catches many exporters, especially service exporters and freelancers, off guard.

When you export under an LUT, you commit to realising your export proceeds in convertible foreign exchange within the prescribed period (generally within a set number of months of the export). If the payment is not realised in foreign currency within that window, the benefit of the LUT can lapse for that transaction, and IGST plus interest may become payable.

This is where getting paid cleanly and on time matters as much as the tax filing itself. If your cross-border payments are slow, opaque, or hard to document, the realisation condition becomes a real risk. Collecting through a [cross-border payments platform](/multi-currency-accounts) that settles your export earnings in convertible foreign currency and issues remittance documentation (such as a FIRA) automatically helps you meet the LUT's realisation requirement, not just get paid.

An LUT is a key document in international trade, and every eligible exporter can use it to protect working capital and improve cash flow, provided you renew it on time and meet the foreign-exchange realisation condition.