GST on Exports 2026 — Zero-Rated Supply, LUT Filing & ITC Refund Guide

Updated: 3 June 2026 | IGST Act + CGST Act | Goods & Services Export | LUT Form RFD-11 & Refund RFD-01

Exports under GST are treated as "zero-rated supply" under Section 16 of the IGST Act — meaning GST rate is effectively zero and the exporter can claim a full refund of Input Tax Credit (ITC). Exporters have two options: (a) Export under Letter of Undertaking (LUT) — no IGST is paid at the time of export; accumulated ITC on inputs is refunded via Form RFD-01. (b) Export with IGST payment — pay IGST on exports and claim cash refund. The LUT route (filing Form RFD-11 once a year) is preferred as it avoids blocking working capital in IGST payments.

Zero-Rated

Exports are zero-rated — not exempt. The difference matters for ITC.
Zero-rated suppliers CAN claim ITC refund. Exempt suppliers CANNOT claim ITC. Exports being zero-rated ensures no GST cost is passed on to foreign buyers.

Zero-Rated Supply vs Exempt Supply — Why It Matters for Exporters

This distinction is the most critical concept in export GST:

Zero-rated supply (exports) — GST rate = 0%, but exporter CAN claim ITC on all inputs, capital goods, and input services. The accumulated ITC can be refunded in cash.
Exempt supply — GST rate = 0%, but supplier CANNOT claim ITC on inputs. Any accumulated ITC must be reversed. Examples: healthcare, education.
Exports are zero-rated precisely so that Indian exporters remain competitive internationally — no GST cost reaches the foreign buyer, and all taxes paid in India are refunded to the exporter.

Option 1: Export Under LUT (Letter of Undertaking)

The LUT route is mandatory for exporters who do not want to pay IGST at the time of export. Process:

File Form RFD-11 (LUT application) on the GST portal — under Services > User Services > Furnish Letter of Undertaking (LUT)
LUT can be filed online; no physical submission required; approved almost instantly
Valid for the entire financial year (April to March); must be renewed annually before 1 April
Eligibility: any registered exporter who has not been prosecuted for tax evasion of ₹2.5 crore or more in the preceding 5 years
After LUT approval, export goods/services without charging IGST
Claim ITC refund on inputs via Form RFD-01 within 2 years of the relevant date
Report exports in GSTR-1 Table 6A (for goods) with shipping bill details

Option 2: Export with IGST Payment and Refund

Under this route, the exporter charges and pays IGST on the export supply, and then claims a cash refund of the IGST paid:

For goods exports: IGST refund is automated — GSTR-1 data is matched with Customs shipping bill via ICEGATE. No separate RFD-01 needed; refund is credited to bank account automatically.
For service exports: File Form RFD-01 to claim refund of IGST paid on export invoices
Bank account details must be registered and validated on the GST portal for refund credit
This route may be preferred when ITC accumulation is low or when the exporter occasionally exports and does not want to maintain a LUT

Export of Services — Conditions for Zero-Rating

A service qualifies as export of services only when ALL five conditions under Section 2(6) of the IGST Act are met:

Supplier is located in India
Recipient is located outside India
Place of supply is outside India
Payment is received in convertible foreign exchange (or Indian rupees where permitted by RBI)
Supplier and recipient are not mere establishments of the same person (no "related party" loophole)

Common examples of zero-rated service exports: IT/software services to foreign clients, BPO/KPO services, consulting to overseas companies, architectural/engineering services for foreign projects, legal services to foreign firms.

Export Types — GST Treatment Table 2026

Export Type	Zero-Rated?	ITC Claim Method	Key Form	Refund Timeline
Export of goods (under LUT)	Yes	ITC refund on inputs	RFD-11 (LUT) + RFD-01	30–60 days
Export of goods (with IGST)	Yes	IGST cash refund (automated)	GSTR-1 Table 6A	7–15 working days
Export of services (under LUT)	Yes	ITC refund on inputs	RFD-11 (LUT) + RFD-01	30–60 days
Export of services (with IGST)	Yes	IGST cash refund	RFD-01	30–60 days
Supply to SEZ (goods/services)	Yes	ITC refund or Nil IGST	RFD-11 + RFD-01	30–60 days
Deemed exports (Advance Auth.)	Yes (deemed)	Supplier or recipient refund	RFD-01	60 days
Supply to EOU	Yes (deemed)	Nil GST or refund	RFD-01	60 days
E-commerce exports (Amazon FBA India → abroad)	Yes	Same as goods export	RFD-11 + GSTR-1	7–60 days

ITC Refund Process for Exporters — Step-by-Step

For exporters using the LUT route (no IGST payment), the ITC refund process is:

File LUT — Form RFD-11 at the beginning of the financial year (or before first export)
Export goods/services — without charging IGST; mention LUT number on export invoices
File GSTR-1 — report export invoices in Table 6A (goods) or Table 6B (services) with shipping bill/BRC details
File GSTR-3B — report zero-rated supplies; ITC will accumulate as there is no output GST liability to offset
File RFD-01 — apply for ITC refund on the GST portal; attach supporting documents (shipping bills, foreign inward remittance certificates/BRCs, export invoices)
Officer processing — GST officer issues acknowledgement (ARN), may seek clarification; must process within 60 days
Refund credited — directly to the registered bank account on the GST portal

Important: ITC refund can only be claimed within 2 years from the relevant date (date of export / date of filing GSTR-3B for that period). Do not delay refund claims.

Frequently Asked Questions

What is the difference between LUT and paying IGST on exports?

An exporter has two options under GST for exporting goods or services. Option 1 — Export under Letter of Undertaking (LUT): The exporter files Form RFD-11 on the GST portal (LUT), exports without paying IGST, and later claims a refund of accumulated ITC (Input Tax Credit) on inputs used in making the exported goods. This is the most common and preferred route as it does not block working capital. Option 2 — Pay IGST and claim refund: The exporter pays IGST at the time of export and then files for a cash refund of the IGST paid. This refund is automated through ICEGATE integration for goods exports and appears as a credit in the bank account. The LUT route is generally preferred by regular exporters to avoid IGST outflow; the IGST+refund route may be used by occasional exporters or where ITC accumulation is lower than IGST outflow.

What are the conditions for a service export to be zero-rated?

Under the IGST Act, a supply of services qualifies as "export of services" (and hence zero-rated) only if all five conditions are met: (1) the supplier of service is located in India; (2) the recipient of service is located outside India; (3) the place of supply is outside India; (4) the payment for the service is received by the supplier in convertible foreign exchange (or Indian rupees wherever permitted by the Reserve Bank of India); and (5) the supplier and recipient are not merely establishments of the same person in accordance with Explanation 1 of Section 8 of the IGST Act. All five conditions must be simultaneously satisfied. If any one condition fails — e.g., payment is in Indian rupees (when not RBI-permitted), or the foreign client is a branch of the same Indian group company — the supply is not treated as export of services and GST applies.

How long does the GST refund on exports take?

For goods exports with IGST paid, the refund is typically processed within 7 to 15 working days through the automated ICEGATE-GST portal linkage — amounts are directly credited to the exporter's bank account. For ITC refund on exports under LUT (without IGST payment), the timeline is longer: exporters must file Form GSTR-1 (Table 6A for exports), file GSTR-3B, and then apply for ITC refund via Form RFD-01 on the GST portal. The tax officer has 60 days to process the refund from the date of acknowledgement (ARN). In practice, most ITC export refunds are processed within 30–45 days. Incomplete documentation, mismatches between GSTR-1 and shipping bill data, or officer queries can delay the refund. The 2-year limitation period for claiming export refunds must be kept in mind.

What is IGST refund for goods exporters?

When a goods exporter pays IGST at the time of export (instead of using LUT), they can claim a full refund of the IGST paid. The process is automatic: the exporter files GSTR-1 with export details (Table 6A), the Customs system (ICEGATE) matches the shipping bill data with GSTR-1 data, and upon successful matching, the refund is transmitted electronically to the exporter's bank account. No separate refund application (RFD-01) is needed for IGST refund on goods. The exporter must ensure: the shipping bill number and GSTR-1 data match exactly; bank account details are correctly registered on the GST portal; and GSTR-3B has been filed for the relevant period. The refund is typically the IGST amount as per shipping bill, adjusted for any discrepancies.

What are deemed exports under GST?

Deemed exports are certain domestic supplies of goods that are treated as exports for the purpose of GST benefits, even though the goods do not physically leave India. The GST Council has notified specific categories of deemed exports under Section 147 of the CGST Act: (1) supply of goods against Advance Authorisation (AA); (2) supply of capital goods to Export Oriented Units (EOUs); (3) supply of goods to EOU/EHTP/STP/BTP units; (4) supply of gold by a bank/PSU notified by the government to a jewellery exporter. Deemed exports allow the supplier to supply goods at Nil or refundable GST rate, enabling the recipient (who is manufacturing for export) to reduce their cost. The refund in deemed export cases can be claimed either by the supplier or the recipient, not both.

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