LUT Under GST: Letter of Undertaking for Exports — Complete Guide

Any registered taxpayer who intends to supply goods or services outside India (export) or to an SEZ unit/developer can file a Letter of Undertaking (LUT) under Rule 96A of the CGST Rules, 2017. There is only one disqualifying condition: the taxpayer must not have been prosecuted for any offence under the CGST Act, IGST Act, or any earlier indirect tax law (Central Excise, Service Tax, VAT) where the amount involved exceeds ₹2.5 crore. If the taxpayer has faced such prosecution, they must furnish a bond (Form RFD-11) with a surety (bank guarantee is acceptable) instead of a simple LUT. For most exporters — including IT companies, service exporters, manufacturers exporting goods, e-commerce sellers exporting internationally, and consultants — the simple LUT is available without any bank guarantee or security deposit. The LUT is filed online on the GST portal and is valid for the entire financial year in which it is filed. If you miss filing LUT for a financial year and have already made exports without IGST, you can file the LUT retrospectively (the GST Council and CBIC have allowed this in several circulars) and the exports will be treated as covered under LUT.

Filing the Letter of Undertaking (LUT) on the GST portal is entirely online and takes under 10 minutes. Here are the exact steps: (1) Log in to the GST portal at www.gst.gov.in using your GSTIN credentials. (2) Navigate to Services → User Services → Furnish Letter of Undertaking (LUT). (3) Select the correct financial year for which the LUT is being filed (e.g., 2026-27). (4) The system auto-populates your GSTIN, legal name, and address from registration records. (5) Check the declaration checkbox confirming that you have not been prosecuted for any offence exceeding ₹2.5 crore. (6) Enter the details of two witnesses: name, residential address, and occupation for each. (7) Enter the primary authorised signatory details. (8) Sign using DSC (Digital Signature Certificate) if you are a company/LLP, or EVC (Electronic Verification Code — OTP sent to registered mobile/email) if you are a proprietorship or partnership. (9) Click "Save" and then "Submit." An ARN (Application Reference Number) is generated instantly. (10) Download and save the filed LUT — it is auto-approved; no manual approval by the GST officer is required. Quote the ARN on every export invoice for the financial year.

When a taxpayer exports goods or services under an LUT (having filed Form RFD-11), the export invoice must carry specific mandatory declarations. For export of goods under LUT, the invoice should prominently state: "Supply meant for export under LUT without payment of IGST" along with the LUT ARN (Application Reference Number). For export of services under LUT, the invoice must state: "Supply of services meant for export without payment of IGST under Letter of Undertaking ARN: [your ARN number] dated [date]." Additionally, the invoice must include: GSTIN of the supplier; name, address, and country of the foreign recipient; invoice number and date; description, quantity, and value of goods/services in Indian Rupees (and optionally in foreign currency); HSN/SAC code; and the declaration that IGST is not charged. The shipping bill for goods export must also reference the GSTIN and IGST details (even though IGST is nil, enter 0 in the IGST column). Filing GSTR-1: these invoices must be reported in Table 6A of GSTR-1 as zero-rated supplies. Incorrect invoice declarations can lead to the GST officer disallowing the zero-rating and treating the supply as a regular domestic supply with applicable IGST.

Both LUT (Letter of Undertaking) and Bond are mechanisms under Rule 96A of the CGST Rules to enable zero-rated exports without payment of IGST, but they differ significantly in terms of eligibility, security requirement, and procedural burden. An LUT is a simple self-declaration filed online on the GST portal with no financial security required and no bank guarantee. It is available to all registered exporters who have not been prosecuted for tax offences exceeding ₹2.5 crore. A Bond, on the other hand, is required by taxpayers who have faced such prosecution or who are specifically directed by a GST officer to furnish a bond. A Bond requires a surety — typically in the form of a bank guarantee for an amount covering the potential IGST liability on the proposed exports. The bond amount is not fixed by law but is generally equivalent to one month's expected IGST. The bond also requires a surety from a solvent entity or a bank guarantee from a scheduled bank. In practice, almost all exporters use the LUT route since it involves zero cost, zero paperwork beyond the online filing, and is instantly auto-approved. The bond route is rare and is considered an additional compliance burden.

Yes, it is possible to regularise exports made without filing an LUT. Several CBIC circulars — notably Circular No. 8/8/2017-GST and subsequent clarifications — have allowed exporters to file the LUT for a financial year even after exports have already been made. The GST portal allows you to select the current or upcoming financial year when filing LUT, and the CBIC has clarified that if exports were made without LUT in good faith (but without charging IGST either), the LUT can be filed subsequently and the exports will be deemed to have been made under LUT. However, there are compliance risks: if your GSTR-1 filings have already been submitted showing these transactions as zero-rated without LUT reference, the GST officer may issue a notice demanding IGST on those supplies. In such a case, you have two options: (a) file the LUT retrospectively and submit a reply to the notice with the LUT ARN and all export documentation (FIRC, invoices, shipping bills or BRC); or (b) if IGST was not paid and LUT cannot be applied retrospectively in the specific case, pay the applicable IGST with interest and then file for a cash refund of IGST via RFD-01. Always file the LUT at the start of each financial year (April 1 onwards) to avoid this situation.