A Letter of Undertaking in Form GST RFD-11 is what allows a registered business to export services without paying IGST. You need one before the first export invoice of each financial year, because an LUT is valid only for the financial year in which it is furnished. It lapses automatically on 31 March. An LUT that has not been renewed by the first export of the new year leaves those invoices without cover, which is the gap this post focuses on. The fix is usually a filing that takes a few minutes, provided it is made on time.
When you need an LUT
Section 16(3) of the IGST Act lets a registered person make a zero-rated supply, including an export of services, without paying integrated tax under a bond or a Letter of Undertaking. Refund of the unutilised input tax credit can then be claimed. The alternative under section 16(4) is to pay IGST on the export and claim it back. Notification No. 01/2023-Integrated Tax permits that route for services from 1 October 2023.
So an LUT is needed if, and only if, you want to export without paying IGST at the time of supply. For most service exporters that is the sensible choice, because it avoids putting tax money into the system and waiting for it to come back.
The supply must first qualify as an export of services under section 2(6) of the IGST Act. The supplier must be in India and the recipient outside India, the place of supply must be outside India, payment must be received in convertible foreign exchange or in rupees where RBI permits, and the two parties must not be merely establishments of a distinct person. An LUT does not turn a domestic supply into an export.
Who can use an LUT, and who needs a bond
Under Notification No. 37/2017-Central Tax, as explained in CBIC Circular No. 8/8/2017-GST (4 October 2017), the LUT facility is open to all registered persons who intend to export without paying IGST. The exception is a person who has been prosecuted for an offence under the CGST Act, the IGST Act or an existing law where the tax evaded exceeds ₹250 lakh. Such a person must furnish a bond instead, and the circular requires the bond to be backed by a bank guarantee of 15% of the bond amount.
The LUT is furnished on the registered person's behalf and must be signed by an authorised signatory. Circular No. 8/8/2017-GST lists the working partner, Managing Director, Company Secretary or proprietor, or a person authorised by them or by the Board.
How to file it
The LUT is filed online in Form GST RFD-11 on the GST portal, for the financial year selected. Under CBIC Circular No. 40/14/2018-GST (6 April 2018), an LUT is deemed accepted as soon as the acknowledgement with its ARN is generated, and no physical document has to be submitted to the jurisdictional office.
Keep the acknowledgement on file with the year's export records. It is the evidence an officer will ask for first in any refund claim.
Each export invoice under an LUT must also carry the endorsement required by Rule 46 of the CGST Rules: "Supply meant for export/supply to SEZ unit or SEZ developer for authorised operations under bond or letter of undertaking without payment of integrated tax", using the wording that applies to the supply. The export is then reported in GSTR-1 as an export without payment of tax.
The annual renewal cycle
The LUT is valid for the whole financial year in which it is furnished, and only that year. Nothing carries forward automatically. In practice:
- File for the new year before the first export invoice dated 1 April or later. Treat it as a fixed March or first-week-of-April task in the compliance calendar, alongside other year-start filings.
- Check the ARN, not just the attempt. A filing interrupted on the portal can leave you believing you are covered when you are not. Confirm the acknowledgement appears for the correct financial year.
- Renew even if exports are irregular. A business that exports only a few times a year is the one most likely to forget. An LUT filed in April costs nothing if it turns out not to be needed.
What happens to exports made after an LUT lapses
This is the part that causes real problems. Suppose the LUT for the previous year expired on 31 March, no new one was filed, and export invoices were raised without IGST in April and May.
Strictly, those supplies were made without the cover of an LUT, and the department can treat IGST as payable. CBIC has, however, taken a practical position. Circular No. 37/11/2018-GST (15 March 2018) states that the substantive benefit of zero-rating may not be denied where the exports are established, and that a delay in furnishing the LUT may be condoned, with export under LUT allowed on an ex post facto basis, case by case.
The practical sequence is:
- File the LUT for the current year immediately, so that every invoice from that date onward is covered.
- List the invoices raised in the gap, with dates, amounts and evidence of receipt in foreign exchange.
- Seek condonation of the delay from the jurisdictional officer, relying on Circular No. 37/11/2018-GST. Treat the gap invoices consistently in returns and any refund claim, and expect the question to come up.
- Take advice before paying IGST on the gap invoices as an alternative. It can be the cleaner route in some cases, particularly where a refund claim is planned, but it is a decision with cash and refund consequences.
Prevention is far simpler than any of this.
The undertaking you are actually giving
An LUT is an undertaking, not just a permission. Under Rule 96A(1)(b) of the CGST Rules, as substituted by Notification No. 12/2024-Central Tax, an exporter of services undertakes to pay the tax due with interest under section 50(1). The payment is due within fifteen days after the later of one year from the invoice date or the period allowed under FEMA, including any extension permitted by RBI, if payment for the service has not been received in convertible foreign exchange or in rupees where RBI permits. The Commissioner may allow a further period.
Under Rule 96A(3), if the amount due is not paid, the LUT facility is withdrawn immediately and the amount is recovered. Under Rule 96A(4), the facility is restored as soon as the amount is paid. An overdue foreign receivable is therefore a GST issue as well as a collection issue. Review export receivables against the one-year and FEMA deadlines at least quarterly.
A short checklist for service exporters
- LUT filed for the current financial year, with the ARN on file.
- Every export invoice carries the Rule 46 endorsement.
- Exports reported in GSTR-1 as without payment of tax.
- Foreign receipts matched to invoices, with bank advice and FIRC or e-BRC retained.
- Export receivables reviewed against the Rule 96A time limits.
- Refund of accumulated input tax credit planned, if credit is building up.
Where this fits
If your services were previously treated as intermediary services and taxed in India, the Finance Act 2026 change may mean you need an LUT for the first time. See GST on export of services after the Finance Act 2026 intermediary change.
Wissen Solutions files LUTs and handles GST return compliance for service exporters through our GST, income tax and TDS return filing services.
Sources (checked 24 October 2026)
- CBIC: IGST Act, section 16 (current text)
- CBIC: CGST Rules, Rule 96A (current text, including Notification No. 12/2024-CT)
- CBIC Circular No. 8/8/2017-GST dated 04.10.2017: LUT eligibility, validity, bond and bank guarantee, signatories
- CBIC Circular No. 37/11/2018-GST dated 15.03.2018: condonation of delay in furnishing LUT
- CBIC Circular No. 40/14/2018-GST dated 06.04.2018: LUT deemed accepted on generation of ARN
- Notification No. 37/2017-Central Tax dated 04.10.2017; Notification No. 01/2023-Integrated Tax dated 31.07.2023; CGST Rules, Rule 46