How do I furnish a Letter of Undertaking (LUT) to export goods without paying IGST

Question

I want to export goods without paying IGST upfront and claim input tax credit refund instead, and I want to know how to file the required undertaking. I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

How do I furnish a Letter of Undertaking (LUT) to export goods without paying IGST is governed in India primarily by Central Goods and Services Tax Rules, 2017, Rule 96A, Integrated Goods and Services Tax Act, 2017, Section 16 and Central Goods and Services Tax Act, 2017, Section 54. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Rule 96A of the Central Goods and Services Tax Rules, 2017 allows a registered exporter to supply goods or services for export without payment of integrated tax by furnishing a Letter of Undertaking in Form GST RFD-11 to the jurisdictional officer, undertaking to complete the export within the prescribed period.

An LUT is valid for the whole financial year in which it is furnished and must be renewed each year before the first export of that year, and any registered person is eligible to furnish an LUT unless prosecuted for a tax evasion offence involving an amount exceeding the prescribed threshold, in which case a bond with bank guarantee is required instead.

Under the LUT, the exporter must complete the export of goods within three months from the date of the invoice, or receive payment in convertible foreign exchange within the time allowed under the Foreign Exchange Management Act for export of services, failing which integrated tax along with interest at eighteen percent per annum from the date of invoice must be paid.

Since export without payment of tax under an LUT is a zero-rated supply under Section 16 of the Integrated Goods and Services Tax Act, 2017, the exporter separately becomes eligible to claim a refund of accumulated input tax credit under Section 54 of the Central Goods and Services Tax Act, 2017, following the standard refund procedure.

The LUT application is filed entirely online on the GST portal and is usually auto-approved with an acknowledgement reference number, so exporters do not need to visit the department in the ordinary course.

What to do next: 1) Log in to the GST portal and file Form GST RFD-11 for the financial year; 2) Obtain the acknowledgement reference number confirming the LUT; 3) Export goods or services within the time limits specified under Rule 96A; 4) File refund applications for accumulated input tax credit under the LUT route.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Central Goods and Services Tax Rules, 2017, Rule 96A carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.