Letter of Undertaking under GST
Under the Goods and Services Tax (GST) regime, exports are generally treated as zero-rated supplies but are subject to Integrated GST (IGST).However, exporters have the option to export goods or services without paying IGST upfront by submitting a Letter of Undertaking (LUT).An LUT allows exporters to supply goods or services without the payment of IGST, thereby avoiding the need to pay tax first and then claim a refund later. This helps exporters maintain better cash flow by saving the upfront tax amount.
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INTRODUCTION
What is a Letter of Undertaking (LUT)?
A Letter of Undertaking (LUT) is an undertaking provided by an exporter under GST to export goods or services without payment of Integrated GST (IGST).
If an LUT is not filed, the exporter must pay IGST on the export and later claim a refund, which can block working capital for a significant time. Filing an LUT is a more convenient option as it helps avoid the hassle of refunds and keeps funds unblocked.
The eligibility conditions for filing an LUT under the GST regime are more relaxed compared to the previous tax system, making it easier for exporters to benefit from this facility.
The LUT is filed online using Form GST RFD-11 through the GST portal. By submitting an LUT, the exporter undertakes to comply with all conditions specified under the GST law for exporting without payment of IGST.
Advantage
✅ Advantages of Filing LUT under GST
💡 Avoids IGST Payment
The primary benefit of filing a Letter of Undertaking (LUT) is that exporters can export goods or services without upfront payment of Integrated Goods and Services Tax (IGST). This helps preserve working capital as funds are not blocked for tax payments, which can otherwise affect cash flow significantly.
⚙️ Simplifies the Export Process
By filing an LUT, exporters can avoid the lengthy and cumbersome process of paying IGST first and then claiming a refund later. This reduces bureaucratic hurdles and makes the entire export process smoother and faster.
💰 Improves Cash Flow
When exporters do not have to pay IGST in advance, they enjoy better liquidity. This improved cash flow can be vital for meeting operational expenses, purchasing raw materials, fulfilling orders, or investing in business growth.
✅ Reduces Compliance Costs
Filing an LUT minimizes the compliance burden and costs associated with claiming IGST refunds. It eliminates the need for additional paperwork, administrative effort, and follow-ups involved in the refund process, resulting in time and cost savings.
A LIST OF DOCUMENTS
📑 Documents Required for LUT Filing
✅ PAN Card of the Entity
A clear copy of the PAN card of the exporter’s business entity.
✅ KYC of Authorised Signatory
A copy of the PAN card and Aadhaar card of the partners, directors, or other authorised signatories.
✅ Details of Witnesses
Details of at least two witnesses, including their name, address proof, and PAN card.
✅ GST Registration Certificate
A valid GST Registration Certificate of the exporter.
✅ Import Export Code (IEC) Certificate
A copy of the valid IEC certificate issued by DGFT.
✅ Cancelled Cheque
A cancelled cheque of the exporter’s current account, clearly showing the entity’s pre-printed name.
✅ File LUT Under GST in 3 Easy Steps
1️⃣ Answer Quick Questions
Fill out a simple questionnaire — takes less than 5 minutes
Share basic details and upload required documents
Make payment securely through our payment gateways
2️⃣ Experts Are Here to Help
Dedicated Relationship Manager assigned to you
Preparation and drafting of your Letter of Undertaking (LUT)
Filing of LUT on the GST portal
Obtain Letter of Acceptance
3️⃣ Letter of Undertaking is Filed
Entire process completed in just 3–5 working days
(Subject to Government processing time)
📋 Process of Filing LUT Under GST
| Timeline | Activity |
|---|---|
| Day 1 – Collection | ✔️ Discussion with experts ✔️ Collection of basic information ✔️ Collection of required documents |
| Day 3–4 – Execution | ✔️ Drafting the Letter of Undertaking ✔️ Online submission on GST portal |
| Day 5 – Acknowledgement | ✔️ Receipt of Acknowledgement Number (ARN) ✔️ Sharing LUT Filing Confirmation |
Frequently Asked Questions
Have questions before reaching out? Here are quick answers to some of the most common queries we receive about contacting us, consultations, and service inquiries.
Exports can be carried out in two ways:
With payment of applicable GST: Taxes are paid at the time of export and later refunded, subject to compliance.
Without payment of GST: Exporters can file a Letter of Undertaking (LUT) to export without paying IGST upfront and avoid the hassle of claiming refunds.
If you wish to export goods or services without paying GST, you must file an LUT.
First-time LUT filing can be done anytime before making exports without tax payment.
For continuous benefit, you must file a fresh LUT before the start of every new financial year.
Earlier, only certain exporters with specified turnover or inward remittance limits were eligible. Now, any exporter who wants to export goods or services without paying GST upfront can file an LUT online — there is no turnover limit.
No, exporters are no longer required to file a bond.
Instead, they simply need to file an online Letter of Undertaking (LUT) under GST to export without paying IGST.
Since FY 2018-19, the LUT must be filed online through the GST portal using your GST credentials.
The undertaking is executed on duly stamped paper and submitted digitally — making the process quick and paperless.
An LUT remains valid for the entire financial year in which it is filed.
If the exporter fails to meet export conditions, the LUT may be deemed withdrawn until compliance is restored.