What is LUT in GST? Letter of Undertaking for Exports in 2026: Eligibility, Filing, Deadlines and Refunds

If you export goods or services from India, or supply to a unit in a Special Economic Zone, the first GST question you face is whether to charge IGST on the invoice. Most exporters don't, and the document that lets them skip it is the LUT. This guide is for first-time exporters, freelancers billing foreign clients, manufacturers and merchant exporters. It explains what an LUT is, the law behind it, who can file it, how to file Form GST RFD-11, the deadlines you sign up to, how the refund of input tax credit works, and how the LUT route compares with paying IGST — with worked ₹ figures. Rules were checked against the CGST Rules and CBIC circulars in October 2026.

Quick answer

LUT means Letter of Undertaking. It is a declaration filed online in Form GST RFD-11 that lets a registered person export goods or services, or supply to an SEZ, without paying IGST. In return you promise to pay the tax with 18% a year interest if the goods aren't exported within three months from the invoice date or the payment for services doesn't arrive in time. It is free, valid for one financial year (1 April – 31 March), and counts as accepted the moment the portal issues an ARN.

• Legal basis: section 16 of the IGST Act and Rule 96A of the CGST Rules

• Anyone registered can file, except those prosecuted for evasion above ₹250 lakh (₹2.5 crore)

• Exports under LUT go out tax-free; you claim back the GST paid on inputs as a refund

• File a fresh LUT every financial year, before the first export

• Pan masala, tobacco and certain mint oils can be exported only under LUT or bond

What is LUT in GST?

GST treats exports, and supplies to SEZ units and developers for their authorised operations, as zero-rated supplies under section 16 of the IGST Act. Zero-rated is not the same as exempt. An exempt supply carries no tax and blocks the input tax credit used for it; a zero-rated supply carries no tax at the end, but the credit on everything you bought to make it stays available. Section 16(2) says so in terms: you may take ITC for a zero-rated supply even if it is otherwise exempt.

There are two ways to get the tax out of an export. You can charge IGST on the export invoice, pay it, and get it refunded. Or you can export without paying IGST and claim a refund of the credit that piles up because you have no output tax to set it against. The second route needs a bond or a Letter of Undertaking. Rule 96A of the CGST Rules says any registered person who wants to export without paying IGST must furnish, before export, a bond or an LUT in Form GST RFD-11 to the jurisdictional Commissioner.

The LUT is a promise. By signing it you bind yourself to pay the tax that would otherwise have been due, with interest under section 50(1) of the CGST Act, if the export doesn't complete: within 15 days after three months from the invoice date if the goods aren't exported, and for services within 15 days after one year from the invoice date — or the period allowed under FEMA, with any RBI extension, if that is later — if the payment hasn't been received in convertible foreign exchange or in rupees where the RBI permits. A bond is the same promise backed by stamp paper and a bank guarantee. Since October 2017 the LUT has been open to almost everyone, so the bond is now rare.

LUT at a glance (2026)

RFD-11

Form, filed on the GST portal

Free

No fee, stamp paper or bank guarantee

one financial year (1 April – 31 March)

Validity

fresh LUT each year

three months from the invoice date

Goods must leave India within

Rule 96A(1)(a)

two years from the relevant date

Time to claim the ITC refund

section 54(1)

90%

Provisional refund

low-risk claims, in seven days from the acknowledgement

Export with LUT vs export with payment of IGST

Both routes leave the exporter with no GST cost, but they differ in cash flow, paperwork and who handles the refund.

Under LUT, your export invoice shows no IGST and carries the endorsement Rule 46 prescribes: "SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX". You pay nothing at the time of export. The GST you paid on raw materials, packing, freight and services builds up in your electronic credit ledger, and you claim it back by filing Form GST RFD-01 on the GST portal, where a GST officer processes it.

With IGST payment, the invoice charges IGST at the product's rate and is endorsed "…ON PAYMENT OF INTEGRATED TAX". You pay that IGST in your GSTR-3B, usually from your credit ledger and the rest in cash. For goods, Rule 96 treats the shipping bill itself as the refund application: once the ship or aircraft has left, the export manifest is filed, your GSTR-1 export details match the shipping bill, and GSTR-3B is filed, the customs system credits the IGST to your bank account without a separate application. For services, the IGST refund is claimed in RFD-01 and handled by the GST officer.

LUT route vs IGST-paid route

	Export under LUT	Export on payment of IGST
Tax on the export invoice	None	IGST at the product's rate
Cash needed at export	None	Any IGST not covered by credit
What is refunded	Unused input tax credit (Rule 89(4) formula)	The IGST paid
How the refund is claimed (goods)	RFD-01 on the GST portal	Shipping bill is the claim; paid via customs (ICEGATE)
How the refund is claimed (services)	RFD-01	RFD-01
Provisional refund	90% in seven days from the acknowledgement if low-risk	Not needed — automatic once data match
Available for pan masala, tobacco, mint oils	Yes	No — closed since 1 October 2023
Goods subject to export duty	No refund of ITC	No refund of IGST

Tax on the export invoice

Export under LUT

None

Export on payment of IGST

IGST at the product's rate

Cash needed at export

Export under LUT

None

Export on payment of IGST

Any IGST not covered by credit

What is refunded

Export under LUT

Unused input tax credit (Rule 89(4) formula)

Export on payment of IGST

The IGST paid

How the refund is claimed (goods)

Export under LUT

RFD-01 on the GST portal

Export on payment of IGST

Shipping bill is the claim; paid via customs (ICEGATE)

How the refund is claimed (services)

Export under LUT

RFD-01

Export on payment of IGST

RFD-01

Provisional refund

Export under LUT

90% in seven days from the acknowledgement if low-risk

Export on payment of IGST

Not needed — automatic once data match

Available for pan masala, tobacco, mint oils

Export under LUT

Yes

Export on payment of IGST

No — closed since 1 October 2023

Goods subject to export duty

Export under LUT

No refund of ITC

Export on payment of IGST

No refund of IGST

Which goods must use the LUT. Since 1 October 2023 the IGST-paid route has been available only to notified classes. Notification 01/2023-Integrated Tax, as amended by 05/2023-Integrated Tax, allows all goods and services to be exported on payment of IGST except a short list: pan masala, a range of tobacco products, and peppermint and other mint oils. Exporters of those goods have to use an LUT or bond and claim back their ITC. Section 16(5) of the IGST Act adds that if goods carry export duty, neither the ITC refund nor the IGST refund is available.

Which route suits you. The LUT is the default for most small exporters because it needs no cash at shipment. The IGST route can work for exporters whose credit balance roughly equals the IGST due and who want the faster customs refund. Rule 96(10), which stopped exporters who bought inputs at concessional rates or imported under advance authorisation or EPCG from using the IGST route, was omitted from 8 October 2024 by Notification 20/2024-CT, so that restriction is gone.

Who can file an LUT — and who can't

Notification 37/2017-Central Tax, issued under Rule 96A(5), sets the conditions. Every registered person who intends to export without paying IGST may furnish an LUT in place of a bond, except anyone who has been prosecuted for an offence under the CGST Act, the IGST Act or any of the pre-GST laws where the tax evaded exceeds ₹250 lakh (₹2.5 crore). Note the word: it is prosecution, not a pending show-cause notice or an unpaid demand. A business facing an ordinary dispute can still file an LUT.

Those who are barred must furnish a bond instead. Circular 8/8/2017-GST says a bond must always be accompanied by a bank guarantee of 15% of the bond amount, and is a running bond that has to cover the estimated tax on exports pending at any time. In practice very few exporters fall into this group.

There is no minimum export turnover, no need for a previous year's foreign exchange record, and no separate registration. The same LUT covers exports of goods, exports of services and zero-rated supplies to SEZ units and developers. It must be executed by the proprietor, a working partner, the managing director or company secretary, or someone they have authorised.

Some businesses cannot use it at all:

• Unregistered persons. A freelancer below the registration threshold has no GSTIN to file under. Most service exporters below ₹20 lakh of aggregate turnover don't need GST registration at all, but if you register voluntarily you will need the LUT to keep billing foreign clients without tax.
• Composition taxpayers. Section 7(5) of the IGST Act treats exports as inter-state supplies, and composition dealers are not allowed to make inter-state outward supplies of goods. A composition dealer who wants to export has to opt out first. See our guide to the composition scheme.
• Merchant exporters can file an LUT like anyone else. If they buy from a domestic manufacturer at the 0.1% concessional rate under Notification 41/2017-Integrated Tax (Rate), they must export within 90 days of the supplier's invoice to keep that concession.

How to file an LUT on the GST portal

The LUT is filed online, takes about fifteen minutes and costs nothing. Circular 40/14/2018-GST replaced the old system of physical submission: no documents have to be handed in, and the LUT is deemed accepted as soon as the acknowledgement with an Application Reference Number (ARN) is generated. If it later turns out you were ineligible, the LUT is rejected from the start.

Filing Form GST RFD-11 step by step

1. 1

   Log in to the GST portal

   Sign in at gst.gov.in with the primary authorised signatory's credentials.

2. 2

   Open the LUT form

   Go to Services → User Services → Furnish Letter of Undertaking (LUT).

3. 3

   Pick the financial year

   Select the year the LUT is for — for exports from April 2026, the current financial year.

   Tip: If an LUT for a past year was approved manually, the same screen lets you upload it for the record.

4. 4

   Tick the three declarations

   Confirm that you will export within the time allowed, pay the tax with interest if you don't, and that you are not barred by prosecution.

5. 5

   Add two independent witnesses

   Enter the name, address and occupation of two witnesses. They don't need to be employees or professionals.

6. 6

   Sign and file

   Enter the place, sign with DSC or EVC, and submit. Download the ARN acknowledgement and the RFD-11 PDF.

   Tip: Quote the ARN on your export invoices and keep the PDF with your customs broker.

   Open the GST portal

An LUT runs from the date you file it to 31 March. There is no renewal button; you file a new one for the next year. The safest habit is to file it in the first week of April, before your first export invoice of the year — exporters who forget usually find out when the customs broker or the buyer's bank asks for the ARN.

The conditions you sign up to: Rule 96A deadlines

The LUT is a conditional promise, and Rule 96A spells out what happens if the condition fails.

Goods. If goods invoiced for export under LUT are not exported within three months from the invoice date, or any longer period the Commissioner allows, you must pay the IGST that would have applied, with interest at 18% a year, within 15 days after that period ends. A shipment that slips because the buyer delays a letter of credit or a vessel is cancelled is the common case. Ask for an extension before the three months run out rather than after.

Services. If payment for services exported under LUT has not been received within one year from the invoice date, or the FEMA period including any RBI extension if that is later, the same obligation applies. This version of Rule 96A(1)(b) was substituted by Notification 12/2024-CT on 10 July 2024 to line the GST deadline up with foreign exchange rules. Remember that an export of services also has to meet the five conditions of section 2(6) of the IGST Act — supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange or permitted rupees, and the two not being merely establishments of the same person. If any condition fails, it is not an export and IGST was due from the start.

What happens if you don't pay. Under Rule 96A(3) the LUT facility is withdrawn at once and the amount is recovered under section 79. You then have to pay IGST on every export until you clear the dues, when Rule 96A(4) restores the facility immediately.

Key dates for one export under LUT

Before the first export of the year

File RFD-11 and get the ARN

Invoice date

Export invoice without IGST, endorsed 'under Bond or Letter of Undertaking'

Shipping bill / sailing

Goods leave India — this is also the relevant date for the refund

11th of next month

Report the export in GSTR-1 Table 6A; file GSTR-3B

3 months from invoice

Deadline for goods to leave India (extendable)

Within 2 years of relevant date

File RFD-01 for the ITC refund

Getting your money back: refund of ITC under LUT

An exporter under LUT pays GST on purchases but charges none on sales, so credit builds up. Section 54(3) allows a refund of unutilised ITC on zero-rated supplies made without paying tax, and Rule 89(4) sets the formula:

Refund = (Turnover of zero-rated goods + zero-rated services) × Net ITC ÷ Adjusted total turnover

A few details decide the result. Net ITC is credit on inputs and input services for the period — capital goods are excluded. Turnover of zero-rated goods is the lower of the FOB value in the shipping bill and the invoice value, and is further capped at 1.5 times the value of like goods the same exporter sells in India, as declared by the exporter. Zero-rated services turnover is counted on payments received, not invoices raised. Adjusted total turnover is your state turnover plus services, excluding exempt supplies. The claim also can't exceed the credit actually left in your ledger, because filing the claim debits it.

You file the claim in RFD-01 under the category for export of goods or services without payment of tax, within two years from the relevant date. For goods exported by sea or air, the relevant date is the date the ship or aircraft leaves India; for services, it is the date you receive the payment, or the invoice date if you were paid in advance.

What changed on 1 October 2025. Section 54(6) has always allowed 90% of a zero-rated refund claim to be paid provisionally. Notification 13/2025-CT rewrote Rule 91(2) so that the officer now issues the provisional order in RFD-04 within seven days from the acknowledgement on the basis of the system's risk evaluation. CBIC's Instruction 06/2025-GST tells officers to grant the provisional amount on claims the system rates low-risk and to scrutinise the rest in full. Notification 14/2025-CT excludes two groups from provisional refunds: anyone who hasn't completed Aadhaar authentication under Rule 10B, and suppliers of areca nuts, pan masala, tobacco and essential oils. The balance is settled by a final order, which section 54(7) requires within 60 days of a complete application.

Worked example: an exporter's quarter in rupees

The figures below are illustrative round numbers showing the arithmetic, not a real company. A knitwear maker in Tiruppur has this quarter:

Route 1 — export under LUT. The formula gives ₹40,00,000 × ₹2,40,000 ÷ ₹50,00,000 = ₹1,92,000. But ₹50,000 of credit has already been used to pay tax on domestic sales, leaving ₹1,90,000 in the ledger, so the claim is limited to ₹1,90,000. If the system rates the claim low-risk, 90% — ₹1,71,000 — is sanctioned provisionally within seven days from the acknowledgement of the acknowledgement, and ₹19,000 follows with the final order. No cash leaves the business at shipment.

Route 2 — export on payment of IGST. IGST at 5% on ₹40,00,000 is ₹2,00,000. The exporter has ₹1,90,000 of credit after domestic sales, so it pays ₹1,90,000 from credit and ₹10,000 in cash. Once the shipping bills match its GSTR-1 and GSTR-3B, customs refunds ₹2,00,000 to its bank account. The exporter ends with the same result — no GST cost — but has put up ₹10,000 of cash for a few weeks in exchange for an automatic refund.

A service exporter. A software developer registered in Pune bills a US client ₹30,00,000 under LUT. If the money arrives within the Rule 96A window, nothing is payable and the ITC on its software subscriptions, cloud hosting and co-working rent is refundable. If it never arrives, the developer must pay 18% IGST — ₹5,40,000 — with interest within 15 days after the deadline, because without payment the supply fails the export test.

Late LUTs, missed deadlines and common mistakes

Exporting before filing the LUT. Rule 96A says the LUT must be furnished before export, and the export invoice must say it is under LUT. If you shipped first, Circular 37/11/2018-GST says the substantive benefit of zero-rating should not be denied where exports are established, and that the delay may be condoned with the LUT allowed after the event, depending on the facts. Still, a late LUT invites questions in the refund claim, so file it on day one of the year.

Using last year's ARN. An LUT covers one financial year (1 April – 31 March). Invoices raised on 2 April under last year's ARN are technically exports without a valid LUT.

Mismatched shipping bill and GSTR-1. For the IGST route, a mismatch in invoice number, GSTIN, port code or value between the shipping bill and Table 6A of GSTR-1 holds up the refund until you fix it. Exporters under LUT need the same Table 6A reporting, because customs confirms export against it.

Charging IGST and also claiming ITC refund. Section 54(3) says no refund of ITC is allowed if the supplier also claims a refund of IGST paid on the same supply, or avails drawback of central tax. Pick one route per shipment.

Missing the invoice endorsement. Rule 46 requires the LUT wording on the invoice, along with the recipient's name and address, delivery address and destination country. Use our invoice generator and add the endorsement as a note.

Ignoring foreign-exchange realisation. An LUT protects you only if the money comes in. Track every export in your bank's EDPMS or IDPMS records and follow up on overdue bills well before the deadline.

Before each export under LUT

0/8

• LUT for the current financial year filed — ARN on file
• Invoice shows no IGST and carries the 'under Bond or Letter of Undertaking' endorsement
• Recipient name and address, delivery address and destination country on the invoice
• Shipping bill values and invoice numbers match what you will report in GSTR-1 Table 6A
• Goods will leave India within three months from the invoice date — or an extension has been sought
• Payment terms let the money arrive within the Rule 96A window
• Aadhaar authentication completed, so provisional refunds aren't blocked
• Purchase invoices for the period saved for the RFD-01 refund

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Recent changes exporters should know

1 October 2023. The Finance Act 2021 amendment to section 16 of the IGST Act took effect. The LUT route became the general rule, and the IGST-paid route was limited to notified classes — which, under Notification 01/2023-Integrated Tax as amended, means everything except pan masala, tobacco products and mint oils.

8 October 2024. Rule 96(10) was omitted, removing the bar on the IGST route for exporters who used concessional inputs, advance authorisation or EPCG.

22 September 2025. GST 2.0 changed the rates on many goods. It did not change the LUT rules, but it changed the IGST you would pay on the IGST route and the size of credit balances — garment and textile exporters on 5% now pay less tax on yarn and fibre, so their refund claims are smaller. Our GST on garments guide covers the textile changes.

1 October 2025. Risk-based provisional refunds of 90% within seven days from the acknowledgement began for zero-rated claims.

Finance Act 2026. It amended section 54 to extend provisional refunds to inverted-duty claims and to remove the ₹1,000 minimum for refunds on goods exported with payment of tax. The CBIC law repository showed both as "w.e.f. yet to be notified" when this page was checked, so they do not apply yet. The 57th GST Council met in early October 2026; nothing affecting LUTs had been notified at the time of writing.

Official links

• GST portal — Furnish Letter of UndertakingServices → User Services → Furnish LUT
• Rule 96A, CGST RulesExport under bond or LUT
• Section 16, IGST ActZero-rated supply
• Notification 37/2017-Central TaxWho can furnish an LUT
• Circular 40/14/2018-GSTLUT deemed accepted on ARN
• Rule 89, CGST RulesRefund formula
• Rule 91, CGST RulesProvisional refund in 7 days

What to do next

If you are about to export for the first time, get your IEC and AD code in place, file the LUT for this financial year, and check the paperwork in our export documentation guide. Send buyers a clear proforma invoice and, once shipments start, set a quarterly reminder to file RFD-01 so refunds don't age. For the credit side of the story, read our guide to input tax credit and how exports are reported in GSTR-1.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is the full form of LUT in GST?

LUT stands for Letter of Undertaking. It is the declaration in Form GST RFD-11 that a registered exporter files on the GST portal so it can export goods or services, or supply to an SEZ, without paying IGST. In return, the exporter promises to pay the tax with interest if the goods are not exported in time or the payment for services is not received.

Is LUT mandatory for exporters?

No, but it is the usual choice. Without an LUT or bond you must charge IGST on every export invoice, pay it, and wait for a refund. For pan masala, tobacco products and certain mint oils, the IGST-payment route is closed, so exporters of those goods must use an LUT or bond. Composition taxpayers cannot export at all, because exports are inter-state supplies.

How long is an LUT valid?

An LUT is valid for one financial year (1 April – 31 March). It does not roll over, so you file a fresh RFD-11 for each new year, ideally before your first export invoice after 1 April. The LUT counts as accepted as soon as the portal generates the acknowledgement with an ARN; you do not have to wait for an officer.

Is there any fee for filing an LUT?

No. Filing Form GST RFD-11 on the GST portal is free and needs no stamp paper, documents or bank guarantee. A bond is different: exporters who cannot use an LUT, because they have been prosecuted for evasion above ₹250 lakh (₹2.5 crore), execute a bond on stamp paper backed by a bank guarantee of 15% of the bond amount.

Can I file an LUT after the export has already happened?

The rule says the LUT must be furnished before export. CBIC Circular 37/11/2018-GST, however, says the zero-rating benefit should not be denied where exports are proved, and the delay may be condoned with the LUT allowed after the event. Officers decide case by case, so file the LUT for the year as early as possible and treat late filing as a fix, not a plan.

What happens if goods exported under LUT are not shipped within three months?

Under Rule 96A you must pay the IGST due with interest at 18% a year within 15 days after three months from the invoice date, unless the Commissioner allows more time. If you do not pay, the LUT facility is withdrawn and the amount is recovered. It is restored as soon as you pay what is due.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Rule 96A – CGST Rules, 2017 (export under bond or Letter of Undertaking) — CBIC · accessed 9 October 2026
2. 2.Section 16 – IGST Act, 2017 (zero rated supply) — CBIC · accessed 9 October 2026
3. 3.Notification No. 37/2017–Central Tax (conditions for LUT) — GST Council / CBIC · accessed 9 October 2026
4. 4.Circular No. 8/8/2017-GST (furnishing of bond/LUT for exports) — CBIC · accessed 9 October 2026
5. 5.Circular No. 40/14/2018-GST (online LUT deemed accepted on ARN) — CBIC · accessed 9 October 2026
6. 6.Circular No. 37/11/2018-GST (export refund issues) — CBIC · accessed 9 October 2026
7. 7.Rule 89 – CGST Rules, 2017 (refund application and formula) — CBIC · accessed 9 October 2026
8. 8.Rule 91 – CGST Rules, 2017 (provisional refund) — CBIC · accessed 9 October 2026
9. 9.Section 54 – CGST Act, 2017 (refund of tax) — CBIC · accessed 9 October 2026
10. 10.Rule 96 – CGST Rules, 2017 (refund of IGST paid on exports) — CBIC · accessed 9 October 2026
11. 11.Rule 46 – CGST Rules, 2017 (tax invoice) — CBIC · accessed 9 October 2026
12. 12.Notification No. 05/2023–Integrated Tax (amending 01/2023–Integrated Tax), Gazette of India — Ministry of Finance / Gazette of India · accessed 9 October 2026
13. 13.Notification No. 14/2025–State Tax (Maharashtra), mirroring 14/2025–Central Tax — Government of Maharashtra · accessed 9 October 2026