Save your working capital. File Letter of Undertaking (LUT) under GST for the current Financial Year and export goods/services without upfront tax payment.
Verify if you can file LUT instantly.
Under the GST regime, exports are treated as "Zero Rated Supplies". An exporter has two options:
1. Pay IGST on export and claim a refund later.
2. Export under Letter of Undertaking (LUT) without paying IGST.
[Image of GST Export Options Flowchart]
Filing an LUT (Form GST RFD-11) is a compliance procedure where the exporter declares that they will fulfill all export requirements. If they fail to export goods within 3 months or receive payment for services within 1 year, they undertake to pay the applicable IGST along with interest.
Paying 18% IGST upfront blocks significant funds. With LUT, you pay Zero tax at the time of export, keeping your cash flow healthy.
The LUT Reference Number (ARN) is mandatory in the Shipping Bill. Without it, customs may demand IGST payment before allowing export.
No physical visits to the GST department. The entire process, from application to approval (ARN generation), is digital and instant.
To file Form GST RFD-11, you need details of two independent witnesses.
Must be a registered GST taxpayer.
Must intend to supply goods/services to SEZ or Export.
Restriction: Should not have been prosecuted for any offence under the CGST Act or IGST Act where tax evaded exceeds ₹ 250 Lakhs.
Log in to GST Portal > User Services > Furnish Letter of Undertaking.
Select Financial Year. Enter details of two independent witnesses.
Generate Preview. Sign with DSC or EVC (OTP).
System instantly generates Acknowledgement Receipt Number (ARN).
Annual Compliance
+ GST (Per Financial Year)
An LUT is a promise to the President of India. If you break it, the interest penalties are brutal.
The LUT converts your exports into "Zero-Rated Supplies." This means you don't charge a single rupee of GST to your foreign client, making your quotes 18% more competitive instantly. CloudDesk ensures your LUT is filed before your first April shipment to avoid "Tax-Traps."
Without an LUT, you pay IGST from your pocket and wait 60–90 days for a refund. For a ₹1 Crore export, that's ₹18 Lakhs blocked. CloudDesk's Same-Day Filing keeps that cash in your bank account, not the government's.
The GST portal requires details of two independent witnesses. We ensure these details are legally sound and that the Authorized Signatory (Director/Partner/Proprietor) signs via DSC or EVC without technical glitches.
Filing the LUT is step one. Step two is Realizing the Payment. If you don't receive foreign exchange within 1 year, you must pay back the IGST with 18% interest. CloudDesk's EDPMS-GST Link alerts you 90 days before this deadline.
No. The LUT is valid only for one Financial Year (1st April to 31st March). It must be renewed at the start of every new year.
An LUT is a simple undertaking used by eligible exporters. A Bond with a Bank Guarantee is required only when the exporter is not eligible for LUT or has been prosecuted for tax evasion above ₹2.5 Crores.
Yes. Service exporters (IT, Consultancy, BPO, SaaS, etc.) must file LUT to issue export invoices without charging IGST.
An LUT is valid for one financial year only (April 1 to March 31). You must file a fresh renewal for FY 2026-27 immediately after the current year ends.
Any registered GST taxpayer who has not been prosecuted for tax evasion exceeding ₹2.5 Crore. If you are under investigation or have a history of major fraud, you must furnish a Bond (on Stamp Paper) instead of an LUT.
Yes. But it only applies to exports made after the filing date. You cannot apply it retroactively to shipments already dispatched.
In 2026, the process is mostly self-declaration. You don't need to upload the IEC or GST cert, but you must have the Previous Year's LUT ARN handy if you are renewing.
Absolutely. Whether you export software, consulting, or car parts, the LUT route is the standard way to avoid IGST.
Customs may reject the shipping bill, or the GST department may treat it as a "Taxable Supply," demanding IGST. CloudDesk provides a Standard Invoice Template that includes the mandatory "Export under LUT" declaration.
You undertake to:
1. Export the goods within 3 months of the invoice date.
2. Realize the payment in foreign currency within 1 year (or as per RBI rules).
You must pay the applicable IGST plus 18% interest within 15 days of the expiry of the 3-month period. If you don't, your LUT facility can be withdrawn.