What is LUT (Letter of Undertaking)?
An LUT, or Letter of Undertaking, is a declaration a GST-registered exporter files online on Form GST RFD-11. By filing it, you undertake to meet the conditions for zero-rated exports, and in return you can export without charging or paying IGST on each invoice. It is filed for a financial year, so most exporters file a fresh LUT before the year begins.
Why it matters for exporters
Export of services is a zero-rated supply under Section 16 of the IGST Act. You can either pay IGST on export invoices and claim it back, or export under LUT and pay nothing upfront. The LUT route keeps cash in the business, which is why most service exporters use it. Under LUT, your invoice should carry the line "Supply meant for export under LUT without payment of IGST".
The LUT only helps if the supply really is an export of services under Section 2(6) of the IGST Act, including payment in convertible foreign exchange or rupees where RBI permits. It sits entirely in GST and has no bearing on your EDF: the EDF is a FEMA declaration that does not change GST obligations, and the LUT does not replace the EDF. Our export invoice generator adds the LUT wording, and the guide to filing Form GST RFD-11 walks through the filing.
Example
Cedar Labs Pvt Ltd files its LUT on RFD-11 in March for the coming financial year. In October 2026 it invoices a US client USD 9,000 (about ₹7,90,000) with the LUT line and no IGST. Separately, it files the EDF for that invoice with its AD bank by 30 November 2026.
Common confusion
An LUT is not a licence to export and is not a FEMA document. Forgetting to renew it for a new year can mean IGST becomes payable on exports until you file. Check with your CA if you missed it. This is general information, not tax advice.