Why exporters file an LUT
Exports are zero-rated under GST, but that zero rating can be achieved two ways: pay IGST at the time of export and claim it back as a refund, or export under an LUT without paying it at all. For most exporters, the LUT route is simpler — it avoids tying up working capital in a tax payment that would otherwise sit with the department until a refund is processed, and it avoids the refund application process entirely for that export.
The LUT itself is a straightforward, largely self-declaratory filing for most businesses — no bond or bank guarantee is needed unless the exporter has a specific compliance history that disqualifies them from the simplified route.
LUT compared with paying IGST and claiming a refund
| Feature | Export under LUT | Export with IGST paid |
|---|---|---|
| Cash flow impact | No tax paid upfront on the export | IGST paid at the time of export, refunded later |
| Refund process needed | No — only unutilised input credit, if any, may need a separate refund | Yes — the IGST paid is claimed back through a refund application |
| Filing required | LUT once per financial year (RFD-11) | None upfront, but a refund application (RFD-01) after each export or period |
| Generally preferred by | Most exporters, for the cash-flow advantage | Exporters ineligible for LUT, or those who prefer the refund route for specific reasons |
Documents required
- GST registration certificate.
- PAN of the entity and of the authorised signatory.
- Details and address proof of two independent witnesses, as required on the LUT form.
- A board resolution or authorisation letter naming the person authorised to sign the LUT, for a company or LLP.
- Confirmation that the applicant hasn't been prosecuted for tax evasion above the threshold that would disqualify them from the simplified LUT route.
The LUT filing process, step by step
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Eligibility check
Confirming the exporter meets the criteria for the LUT route, rather than needing to furnish a bond and bank guarantee instead.
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Preparing Form RFD-11
The form is completed with the entity's details, the authorised signatory, and witness details.
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Online filing
The LUT is filed on the GST portal for the relevant financial year, and an Application Reference Number is generated on submission.
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Acknowledgement
A signed copy of the acknowledged LUT is available for download, which is what's referenced on export invoices for the year it covers.
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Annual renewal
Since the LUT is valid for one financial year only, a fresh application is needed at the start of each new year — missing this means reverting to the pay-and-refund route for exports made without a valid LUT in place.
Practical notes from our engagements
- LUT renewal missed at the start of the financial year. Because it's a once-a-year filing, it's easy to let it lapse — exports made after the previous year's LUT expires, without a fresh one in place, technically need IGST paid and later refunded.
- Invoices not referencing the LUT correctly. Export invoices made under LUT need to state that the supply is made under LUT without payment of IGST — getting this wrong on the invoice can complicate a later refund claim for unutilised input credit.
- Confusing "no IGST paid on export" with "no GST anywhere in the chain." The LUT covers the export itself; it doesn't affect GST on domestic inputs used in the exported goods or services, which is why unutilised input credit refunds remain relevant even for LUT exporters.
How we handle LUT filing
We track the annual renewal date for clients on our engagement calendar, so the LUT is refiled before the previous year's expires rather than after an export has already gone out without one in place. We also confirm invoices reference the LUT correctly, since that detail matters when a related refund claim is eventually filed.
Related services
Frequently asked questions
How often do I need to file an LUT?
Once per financial year — a fresh LUT has to be filed at the start of each new year to keep exporting without paying IGST upfront.
What happens if my LUT expires and I export anyway?
The export is then treated as made without a valid LUT, meaning IGST technically needs to be paid at the time and claimed back through a refund application instead.
Do I need a bank guarantee to file an LUT?
Most exporters don't — LUT is a simplified, largely self-declaratory route. A bond with bank guarantee is only required for exporters who don't meet the LUT eligibility criteria.
Does LUT cover GST paid on inputs used in the export?
No — LUT specifically covers not paying IGST on the export supply itself. Input tax credit on domestic purchases used for the export may still need to be claimed separately as a refund.
Can a new exporter, with no prior export history, file an LUT?
Yes — LUT eligibility isn't based on having a prior export track record, though the general disqualifying conditions around tax evasion prosecution still apply.