Export essentials
Posted on Feb 25, 2025
You're an Indian exporter, eagerly looking forward to shipping your products overseas. The overseas market is beckoning, and you're looking forward to the prospects.
But then you learn about IGST (Integrated Goods and Services Tax) on exports. Your excitement is replaced with fear. Paying taxes in advance even before you sell anything?
That's a hassle.
But here's a secret: You don't really need to pay IGST in advance. Meet the Letter of Undertaking (LUT). It's your fast pass, where you can export goods and services without paying IGST, provided you submit the correct documents.
In this blog, we'll demystify how LUT works, who requires it, and how you can submit it hassle-free.
What is LUT in GST & Why Do Exporters Require It?
The Letter of Undertaking (LUT) is a letter that permits Indian exporters to export goods and services overseas without paying IGST in advance.
Why is this so crucial? Well, without LUT, you have to pay IGST initially and claim a refund subsequently. But with LUT, you don't have to pay the tax at all, and hence, the export procedure becomes faster and cheaper.
Why Exporters Need It
If you're an exporter wanting to do international sales, LUT can benefit you in terms of saving money and time. Rather than waiting for refund of IGST, you can make your export transactions without initial expenses. That's why every exporter must learn how to apply for it.
Who Can Apply for LUT?
You may apply for an LUT if:
You're a good or service exporter.
You have no outstanding tax dues or GST defaults.
Your business entails zero-rated supplies in GST.
Did You Know?
Even independent professionals and software services providers supplying work abroad can make use of LUT to evade payment of IGST on payment received from foreign clients.
LUT vs. Bond: What’s the Difference?
If your business doesn’t qualify for LUT, you may need to furnish a Bond with a bank guarantee. But let’s compare the two:
Pro Tip:
Always choose LUT if you qualify—it’s faster, easier, and doesn’t require any security deposit.
Step-by-Step Guide to Filling LUT Online (2025 Update)
Filing LUT is easy, and it is filed via the GST Portal. This is how you do it:
Login to the GST Portal
Go to Services > User Services > Furnish LUT
Enter the financial year and other mandatory details
Upload supporting documents (if required)
Digitally sign using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code), and click Submit!
Mistakes to Avoid
Uploading incorrect documents.
Not renewing your LUT at the start of every financial year.
Not verifying for GST prior to applying.
✅ Related Read: GST on Exports: Everything You Need to Know
Infinity: Say Goodbye to IGST Hassles!
Come on—filing an LUT sounds wonderful, but who does anyone know has time to fight with the GST portal, triple-check documents, and fret over compliance errors? Make one small mistake, and you're into the cycle of delay and papering.
That's where Infinity steps in. We simplify LUT filing for you, so you can remain compliant without even lifting a finger. No headaches, no confusion—just seamless, hassle-free exports.
Why let IGST hold you back when you can export more smartly? Sign up for Infinity today and do away with GST guesswork!
Frequently Asked Questions Regarding LUT in GST
Q1: Do I have to renew LUT annually?
Yes, LUT has to be renewed every year prior to the commencement of the new financial year.
Q2: What is the consequence of not filing LUT?
In case you neglect to file LUT, you will have to pay IGST in advance and subsequently claim a refund, which can take a considerable period of time.
Q3: How many days does approval of LUT take?
Permission would typically be anywhere from a couple of minutes to a couple of days based on your history of GST compliance.
