LUT Filing for Exporters — Export Without Paying IGST

If your business exports goods or services from India, you have the option to export without paying IGST (Integrated Goods and Services Tax) — by filing a Letter of Undertaking (LUT) on the GST portal. Without an LUT, exporters must either pay IGST and then claim a refund, or furnish a bond. The LUT route is the simplest, fastest, and most preferred by exporters. This guide explains everything you need to know about LUT filing in India.

Who needs this: Any GST-registered exporter of goods or services — manufacturers, traders, IT/software service exporters, e-commerce exporters, and SEZ suppliers.

1. What is LUT Under GST?

A Letter of Undertaking (LUT) is a declaration furnished by an exporter on the GST portal under Rule 96A of the CGST Rules — undertaking to comply with all GST export conditions and to pay the applicable IGST with interest if the export is not completed within the stipulated time. Once the LUT is accepted, the exporter can:

• Export goods without paying IGST at the time of export
• Export services without paying IGST
• Supply to SEZ units without tax payment

This is a significant cash flow advantage — exporters don't need to block working capital in tax payments and wait for refunds.

2. Who Can File LUT?

Any GST-registered exporter can file an LUT, provided:

• The exporter has not been prosecuted for tax evasion involving an amount of ₹2.5 crore or more under the CGST Act, IGST Act, Customs Act, or any other law in force
• The exporter has no pending export obligation from previous LUTs (i.e., prior LUT conditions have been complied with)

Exporters who have been prosecuted for tax evasion of ₹2.5 crore or more are not eligible for LUT — they must furnish a Bond with bank guarantee instead.

3. How to File LUT on the GST Portal

• Step 1: Login to GST portal (gst.gov.in) → Services → User Services → Furnish Letter of Undertaking (LUT)
• Step 2: Select the financial year for which LUT is being filed
• Step 3: Fill in the LUT application — details of authorised signatory, witnesses, and the undertaking conditions
• Step 4: Upload supporting documents if required (varies by state GST office)
• Step 5: Submit using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code)
• Step 6: LUT is filed and accepted — the ARN (Acknowledgement Reference Number) is generated
• Step 7: Mention the LUT ARN in your export invoices going forward

The process is entirely online. There is no requirement to visit the GST office or submit physical documents in most cases.

4. Validity and Renewal of LUT

• An LUT is valid for one financial year — from 1st April to 31st March
• A new LUT must be filed at the beginning of each financial year before the first export of that year
• Exporters should ideally file the new LUT in March itself (before year end) to ensure no gap in export operations on 1st April
• There is no fee for filing an LUT — it is free of cost on the GST portal
• Failure to file LUT before exporting means IGST must be paid — and a refund claim filed separately

5. LUT vs Bond vs IGST Refund — Which is Better?

Option	Cash Flow Impact	Admin Burden	Best For
LUT (most preferred)	No tax paid — zero cash blockage	Low — one filing per year	All eligible exporters
Bond with bank guarantee	Bank guarantee blocks funds	High — bank guarantee required	Exporters with prosecution history
Pay IGST & claim refund	Tax paid upfront — refund takes 15-60 days	Medium — refund filing required	Occasional or one-time exporters

For any regular exporter, LUT is clearly the best option — no tax payment, no refund hassle, minimal paperwork once per year.