A Letter of Undertaking (LUT) lets a GST-registered service exporter bill foreign clients without charging IGST, instead of paying the tax and waiting for a refund. You furnish it online on the GST portal in Form GST RFD-11, and once it is accepted every qualifying export invoice can go out zero-rated with the line "Supply meant for export under LUT without payment of IGST". For most exporters it is the single best cash-flow decision in GST.
Key takeaways
- Export of services is a zero-rated supply under Section 16 of the IGST Act.
- You can export under LUT (no IGST) or pay IGST and claim a refund; LUT keeps money in your business.
- LUT is filed in Form GST RFD-11 on the GST portal and covers a financial year, so it is renewed annually.
- Invoices under LUT must carry the wording "Supply meant for export under LUT without payment of IGST".
- The LUT is a GST matter. It has nothing to do with filing the EDF under FEMA, which you still do monthly.
What an LUT actually is
When you export a service that meets the conditions in Section 2(6) of the IGST Act, the supply is zero-rated. That means no output tax is ultimately borne on it, but you still choose how to get there. There are two routes:
| Route | IGST on invoice | Cash impact | Refund claim |
|---|---|---|---|
| Under LUT | None | No tax outflow on exports | Refund of accumulated input tax credit, if any |
| With IGST paid | Charged at applicable rate | Tax paid upfront | Refund of IGST paid on exports |
The LUT is your undertaking to the department that you will meet the export conditions, including receiving payment in convertible foreign exchange (or in rupees where RBI permits). In return, you skip paying IGST on each export invoice. See the LUT glossary entry for a one-paragraph definition.
Who should file one
If you are registered under GST and you invoice foreign clients for services that qualify as exports, an LUT almost always makes sense. Common examples are software development, design, consulting, content and back-office work billed to clients abroad.
The five Section 2(6) conditions need to hold for the supply to be an export: you are in India, the recipient is outside India, the place of supply is outside India, payment comes in convertible foreign exchange or in rupees where RBI permits, and you and the recipient are not merely establishments of the same person. If your service might be an intermediary service, or the place of supply is in India, talk to your CA before relying on LUT for it.
How to file Form GST RFD-11
The filing is online and short. Exact screen labels on the GST portal change from time to time, so treat this as the logic rather than a click path.
- Log in to the GST portal with your GSTIN credentials.
- Open the LUT option under the user services area, and choose the financial year you are filing for.
- Answer the declarations about past compliance that the form asks you to confirm.
- Enter witness details. The form asks for two independent witnesses, with names, addresses and occupations. Keep them ready.
- Fill the place and date, and identify the authorised signatory.
- Sign and submit using a digital signature certificate or EVC, as your registration type allows.
- Download the acknowledgement. The ARN and the LUT itself should be saved with your GST records.
Many CAs file LUTs for clients in a few minutes at the start of the financial year. If you do it yourself, make sure the authorised signatory on the portal is the person actually signing.
Timing: file before your first export invoice of the year
An LUT is given for a financial year, so one filed for FY 2026-27 covers April 2026 to March 2027. Filing it in March or the first days of April means your first export invoice of the new year can go out under LUT without hesitation.
Consider Saffron Pixel Studio Pvt Ltd, a Bengaluru animation house. It forgot to renew its LUT and raised two export invoices on 4 April worth ₹6,80,000 combined. Its CA advised filing the LUT at once and checking how the two invoices should be treated, since they were raised before the new LUT was in place. The fix was manageable, but it cost a week of back-and-forth. A calendar reminder in March would have avoided it. We cover the timing in detail in LUT renewal for FY 2027-28.
The invoice wording under LUT
Every export invoice issued under LUT should carry this line:
Supply meant for export under LUT without payment of IGST
Put it close to the tax summary so nobody misses it. Alongside it, a clean export invoice should show your GSTIN, the client's name and address outside India, the place of supply, the SAC code, the invoice currency and amount, and the LUT reference. Our free GST invoice generator includes an LUT option that adds the line for you.
LUT and the EDF are separate systems
Exporters sometimes assume that because they filed an LUT, their export paperwork is done. It is not. The LUT is a GST undertaking. The EDF is a FEMA declaration filed with your AD bank (or STPI, or the SEZ Development Commissioner) within 30 days from the end of the month of the invoice. The EDF does not change your GST obligations, and the LUT does not satisfy FEMA.
In practice the two connect at realisation. Payment in foreign exchange is a GST export condition, and FIRAs and eBRCs that come out of the EDF process often support your GST records and refund claims. Keep both sets of documents linked by invoice number.
This is general information, not legal or tax advice. Your CA should confirm eligibility and filing details for your registration.
Frequently asked questions
Is an LUT mandatory for export of services?
No. You can choose to pay IGST on exports and claim a refund instead. Most exporters prefer LUT because it avoids blocking cash in tax that will be refunded later.
How long is an LUT valid?
An LUT is furnished for a financial year. You file a fresh RFD-11 for each new financial year, ideally before your first export invoice in April.
Can I file an LUT if I am not registered under GST?
The LUT is filed on the GST portal against a GSTIN, so it applies to registered persons. Whether you need GST registration at all depends on your turnover and circumstances, which your CA can confirm.
What happens if I issue an export invoice without LUT wording?
The invoice may be questioned because it does not show the basis for not charging IGST. Correct your template and speak to your CA about whether earlier invoices need any fix.
Does filing an LUT replace the monthly EDF?
No. The LUT is a GST undertaking; the EDF is a FEMA declaration to your bank. You still file one EDF per month for your service exports.
Bottom line
File Form GST RFD-11 before the financial year starts, keep the acknowledgement safe and make sure every export invoice carries the LUT line. Then handle the FEMA side separately each month. Create LUT-ready invoices with our free export invoice tool.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.