Rule 96A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A letter of undertaking is not a formality. It is a binding undertaking with two deadlines and an automatic consequence, and the consequence is often discovered only when a demand arrives.
Rule 96A(1): any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11, binding himself to pay the tax due along with interest under s.50(1) within fifteen days after the expiry of — (a) three months, or such further period as the Commissioner may allow, from the date of issue of the invoice for export, if the goods are not exported out of India; or (b) the period allowed under the Foreign Exchange Management Act, 1999, if the payment for services is not received by the exporter in convertible foreign exchange or in Indian rupees where the RBI permits.
The two deadlines
Goods — three months from the date of the export invoice. The goods must actually leave India. The Commissioner may allow a further period, on application.
Services — the period allowed under FEMA for realisation of export proceeds. The earlier formulation was one year from the date of the export invoice; the substituted clause (b), by Notification No. 12/2024-CT, ties it to the FEMA period, which is the more coherent reference.
The consequence: fifteen days
Missing either deadline does not merely lose the zero-rating. It triggers an undertaking already given:
- pay the integrated tax that would have been payable on the supply;
- with interest under s.50(1), at 18%;
- within fifteen days of the expiry of the period.
Rule 96A(3): where the tax is not paid within the said period, the facility of export without payment of integrated tax shall be withdrawn, until the amount due is paid.
Rule 96A(2): the details of the export invoices contained in FORM GSTR-1 are transmitted electronically to the customs system, and the customs system transmits back the confirmation that the goods have been exported.
Rule 96A(5): the Board may, by notification, specify the conditions and safeguards subject to which a Letter of Undertaking may be furnished in place of a bond.
The restoration proviso
Rule 96A(1) proviso: where the goods are exported within such further period as may be allowed by the Commissioner, or where the payment for services is received within the period allowed under FEMA including any extension, the registered person shall be entitled to refund of the amount of integrated tax paid under the undertaking.
So the payment made on missing the deadline is recoverable if the export or the realisation subsequently happens. It is a security deposit in substance, not a penalty.
The claim is made in FORM GST RFD-01 under the appropriate category, subject to the two-year limit in s.54(1).
Who may furnish an LUT rather than a bond
The distinction between a bond — which requires a bank guarantee — and a Letter of Undertaking, which does not, is significant in working capital terms.
The notified conditions permit an LUT for a registered person who has not been prosecuted for any offence under the CGST Act or any existing law where the amount of tax evaded exceeds ₹250 lakh.
Everyone else furnishes a bond with a bank guarantee, ordinarily not exceeding 15% of the bond amount, though the Commissioner may waive it.
Validity: an LUT is furnished for a financial year and must be renewed. Filing is on the portal in FORM GST RFD-11, and acceptance is generally automatic.
What the LUT covers
Exports of goods or services without payment of IGST.
Supplies to an SEZ developer or SEZ unit for authorised operations, without payment of IGST — s.16(3)(a) of the IGST Act read with Rule 96A. SEZ registration and supplies →
It does not cover:
- deemed exports, which are taxable supplies with tax paid and refunded; Deemed exports →
- merchant exports at 0.1%, which are domestic supplies at a concessional rate;
- out-and-out supplies under Schedule III paragraph 7, which are not supplies at all. Merchant trade and out-and-out supplies →
Practical notes
- Renew the LUT before 1 April. An export made before the new year's LUT is furnished is technically an export without a valid undertaking.
- Track the three-month clock per invoice, from the export invoice date, not the order date or the shipping date.
- Track FEMA realisation per invoice, including extensions obtained.
- Where the deadline will be missed, apply to the Commissioner for extension before it expires, not after.
- Where it is missed, pay within fifteen days. Paying late compounds interest and withdraws the LUT facility under Rule 96A(3).
- Claim the refund when the export or realisation happens — the payment is recoverable.
- Rule 96B separately recovers refunds already paid where proceeds are not realised. Rule 96B →
Key takeaways
- RFD-11 bond or LUT, furnished before export, binding the exporter to pay tax with interest if the conditions fail.
- Goods: three months from the export invoice, extendable by the Commissioner.
- Services: the FEMA realisation period, including extensions.
- Failure triggers payment of IGST with 18% interest within fifteen days.
- Rule 96A(3): non-payment withdraws the LUT facility until cleared.
- The tax paid is refundable if the export or realisation subsequently occurs.
Read next
- LUT for Exporters: Letter of Undertaking
- Rule 96: The Shipping Bill as a Refund Application
- Rule 96B: Recovery Where Export Proceeds Are Not Realised
- Zero-Rated Supply: Exports and SEZ Under IGST
Disclaimer: Positions stated as on 5 September 2026, based on the CGST Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition) and the ICAI Handbook on Refunds under GST (January 2026).