A Letter of Undertaking (LUT) lets you export goods or services without paying IGST. Supplies to an SEZ go the same way. We prepare it and file it with you from your GST login each year. Your authorised signatory signs.
Letter of Undertaking
GST registrationThe one that bills your exports
Financial yearEach year on its own
CoversExports and SEZ supplies
Your promiseTax and interest if an export falls through
It depends on what you supply and who buys it. Pick the case closest to yours.
What do you supply?
You need an LUT
It lets you ship without paying IGST. That holds whether you manufacture the goods or buy them to export. Goods free of GST need no LUT. You can still claim back the GST on your inputs. Goods that carry export duty are the exception: they get no refund. The goods must leave India within the set time from your invoice. Customs also needs your IEC on the shipping bill.
A service counts as an export when your client is abroad and the place of supply is outside India. Your client pays in foreign currency or in rupees where the RBI allows. The money must arrive within the set time. Some services stay taxed in India even for a client abroad, such as storing goods here. A service to your own branch abroad is not an export either. If you are not registered for GST you charge no GST. Then you need no LUT.
You need an LUT
A supply to an SEZ unit or developer is zero rated, like an export. You bill it under your LUT without IGST. This holds only for the unit's authorised operations. So check that its approval covers what you supply.
An LUT does not apply
Supplies to an export oriented unit are not zero rated. You charge GST as usual. Goods manufactured in India can count as deemed exports, as supplies against an Advance Authorisation do. Then you or your buyer can claim the GST back. Services to an EOU do not count.
You pay the IGST on each export and claim it back as a refund. You can pay it from your input credit or in cash. Either way that money waits until the refund comes. Pan masala, mint oils and many tobacco products cannot take this route. The same holds for supplies of them to an SEZ. They go out under an LUT or a bond.
Give a bond or put it right
Anyone prosecuted for tax evasion above a set amount cannot use an LUT. They export under a bond with a bank guarantee or pay the IGST. You also lose your LUT when goods miss the time and the tax stays unpaid. Pay the tax and interest. Your LUT then comes back at once.
An LUT sits on your GST registration. You file it from your GST login for one financial year at a time.
GST registrationGST
An authorised signatorySignatory
Digital signature or EVCSignature
WitnessesWitnesses
LUT for the yearLUT
What the form asks for
Your registration
Your GSTIN and legal name. The form fills them in from your login.
The financial year
The year the LUT will cover. You file a new one each year.
Your declarations
You promise to pay the tax with interest if an export falls through. You also declare that no prosecution bars you from an LUT.
Witnesses
The name, address and occupation of independent people you trust.
Your signatory
Your primary or another authorised signatory. You pick the name from a list.
The signature
A digital signature or an EVC. The EVC is a code sent to the signatory's mobile and email.
An earlier paper LUT
Only if an officer approved one on paper for the same year. You may upload it to record it online.
For exporters of goods
You need no IEC or AD code to file an LUT. Customs asks for both on each shipping bill for goods.
How to file an LUT on the GST portal
We prepare it and file it with you from your GST login. Your authorised signatory signs.
We check that your GST registration is active and nothing bars you from an LUT. Then we list each registration that bills exports.
We fill in the form for the year with your witnesses. You check the preview.
Your authorised signatory signs with a digital signature or with EVC.
We file it with you on the GST portal. The portal sends you a reference number (ARN) by SMS and email.
Your LUT counts as accepted once the portal gives you the ARN. An officer may still ask a question. The officer can reject it if you were not eligible.
Each export invoice says it goes under LUT without IGST. For goods our customs team prepares the shipping bill from the same invoice.
How we keep your LUT working
An LUT lasts one financial year. Each export under it brings duties of its own.
A new LUT
Every year
Your LUT ends with the financial year. We prepare the next one before your first export of the new year.
One LUT for each
Each GST registration
Each registration that bills exports needs its own LUT. We file one for each.
The LUT line
Each export invoice
The invoice must say the supply goes under LUT without IGST. We check yours before the goods leave.
Out of India in time
Each export of goods
The goods must leave India within the set time from the invoice. If they do not you pay the IGST with interest. So raise the invoice when the goods are ready to go.
Paid in time
Each export of services
Your client must pay within the set time. If the money is late you pay the IGST with interest.
Exports reported
Each GST return
Your return lists each export of goods with its shipping bill. Customs matches them to confirm your goods left. We give you the shipping bill details.
Refund of input GST
When you claim
The GST you pay on inputs builds up. You claim it back as a refund within the time limit. The claim lists each export. No refund comes on goods that carry export duty.
Refund paid back
If a buyer does not pay
Your buyer abroad must pay for your goods within the time the RBI allows. If the money does not come within that time you pay back the refund on those goods with interest. If the RBI writes off the payment you pay nothing back.
Where LUTs go wrong
Most trouble starts with a date nobody watched or papers that do not match.
What goes wrongWhat we do
What goes wrong: A new year starts and nobody files the next LUT. The first exports of April go out without one.
What we do: We prepare next year's LUT before your first export of the year.
What goes wrong: You bill exports from a second state's registration. Only the head office has an LUT.
What we do: We file an LUT for each registration that bills exports.
What goes wrong: The invoice goes out weeks before the goods. The time runs out while they wait.
What we do: We pack and load your order at our warehouse when it is ready. So you can invoice close to the day it ships.
What goes wrong: The invoice leaves out the LUT line.
What we do: We check each export invoice before we prepare its shipping bill.
What goes wrong: The invoice and the shipping bill show different values. The officer works out the refund on the lower one.
What we do: Our customs team prepares the shipping bill from the same invoice as your GST return.
What goes wrong: Goods do not leave in time and nobody pays the tax. You lose the LUT.
What we do: We pack your order when it is ready, so the time starts close to the day it ships. If the time does run out you pay what is due. Then the LUT comes back at once.
Export from our warehouse under your LUT
Your LUT sits on your GST registration, not on a warehouse. Once our warehouse is on the registration that bills your exports your stock can wait with us and still ship under it.
Packed when it is ready
We pack and load your export order at our warehouse. You raise the invoice when it is ready to go. So the time to export starts close to the day it ships.
Cleared by our own team
Our customs team prepares your shipping bill from the same invoice as your GST return. Then your invoice, shipping bill and return all agree.
Goods from several suppliers
We gather goods from your suppliers into one export order. If you buy at the lower GST rate for merchant exporters we give a receipt for each supplier's goods.
LUT stands for Letter of Undertaking. You file it on the GST portal to export goods or services without paying IGST. It covers supplies to an SEZ too. You promise to pay the tax with interest if an export falls through. You still claim back the GST on your inputs. Goods that carry export duty are the exception: they get no refund. The LUT runs under section 16 of the IGST Act.
Is LUT mandatory for export of goods?
No. You can pay IGST on the export and claim it back. Customs pays that refund only when your shipping bill and GST return agree. Pan masala, mint oils and many tobacco products cannot take this route. The same holds for supplies of them to an SEZ. They go out under an LUT or a bond. Under an LUT no tax leaves your bank. You claim back the GST on your inputs as a refund. Goods that carry export duty are the exception: they get no refund. Goods free of GST need no LUT at all.
Is LUT required for export of services?
Yes, if you bill an export of services without IGST. It counts as an export only when your client is abroad and the place of supply is outside India. Your client must pay in foreign currency or in rupees where the RBI allows. If the money does not arrive in time you pay the IGST with interest. Billing your own branch abroad is not an export of services. If you are not registered for GST you charge no GST. Then you need no LUT.
Is LUT required for SEZ supply?
Yes, if you supply without IGST. A supply to an SEZ unit or developer is zero rated only for its authorised operations. Anything else carries GST as usual. Supplies to an export oriented unit are not zero rated at all.
Who cannot file an LUT?
Anyone prosecuted for tax evasion above a set amount. They export under a bond with a bank guarantee or pay the IGST. An officer can also turn off LUT filing for a business. And you lose your LUT while tax on a late export stays unpaid.
What is the due date for LUT filing?
The law sets no date. It asks only that you file before you export. Your LUT covers one financial year. So file a new one before the first export of each year. We remind you in good time.
How do I file an LUT on the GST portal?
Log in and open Services, then User Services, then Furnish Letter of Undertaking. Pick the year, tick the declarations and add the witnesses. Your authorised signatory signs with a digital signature or EVC. The portal then gives you an ARN. We prepare it and file it with you from your login.
What documents are required for LUT filing?
The form asks for the year, the declarations, the witnesses, the place and your signatory. You upload nothing. If an officer approved a paper LUT for the same year you may upload it to record it online. Renewal works the same way: a fresh form each year.
Can I file an LUT after export?
You should file it before you export. If you exported first file it at once. CBIC tells officers not to deny the benefit where the export is proven. They may accept the late LUT case by case.
Do I need a separate LUT for each GST registration?
Yes. Each registration counts as its own taxpayer under GST. Each one that bills exports or SEZ supplies files its own LUT. Say you export from our warehouse in another state on that state's GST registration. Then that registration needs an LUT too.
What if my goods leave India late?
Under an LUT the goods must leave within the set time from the invoice. If they have not left you pay the IGST with interest soon after. If you do not pay you lose your LUT until you do. If the goods did leave but late CBIC tells officers not to ask you to pay the IGST first and claim it back later. The Commissioner may extend the time after the event case by case.
How do I download my LUT acknowledgement?
The portal gives you an ARN and an acknowledgement to download when you file. Later you can open Services, then User Services, then View My Submitted LUTs. You can download the LUT from there. The ARN is what people call the LUT number.
