If you export goods or services from India and do not want your working capital trapped in IGST refunds for months, a Letter of Undertaking is the document that unlocks zero-rated supply without paying tax upfront. File it once at the start of each financial year and your export invoices can leave India IGST-free.
Quick answer: A Letter of Undertaking (LUT) in Form GST RFD-11, filed under Rule 96A of the CGST Rules, lets a GST-registered exporter ship goods or services without paying IGST upfront. The alternative is paying IGST and claiming a refund later. An LUT is valid for one financial year and must be re-filed before 31 March every year.
The LUT route is open to almost every exporter, but there is one disqualification. Check this list before you file.
You CAN file an LUT if:
You CANNOT file an LUT (must furnish a bond with bank guarantee instead) if:
If you are barred, you cannot self-declare on RFD-11. You must execute a bond backed by a bank guarantee with your jurisdictional officer before exporting without payment of IGST.
The whole process is online and free. There is no fee for filing an LUT.
Once submitted, the LUT is accepted electronically. You do not need to physically visit any GST office or submit documents to the jurisdictional officer separately.
An LUT is a promise, not a free pass. Rule 96A attaches two hard clocks to it.
The two deadlines under Rule 96A
If you breach either deadline, the LUT facility is withdrawn and you are treated as having made a taxable supply. You must then pay:
This payment is due within 15 days after the relevant deadline expires (the 3-month period for goods). If you fail to pay, the export benefit allowed under the LUT is withdrawn and the amount can be recovered as a tax demand under the CGST Act. The lesson: track your shipping dates and your inward remittances against every export invoice, and act before the clock runs out.
An LUT is valid for one financial year only. It expires on 31 March and does not auto-renew. You must file a fresh Form RFD-11 for the new financial year before your first export of that year.
A common and expensive mistake: an exporter who filed an LUT last April assumes it still covers them in the new April. It does not. If you export in the new year without a valid LUT in place, that supply is not covered by the zero-rated-without-payment route, and you may be forced to pay IGST and claim a refund instead. Mark a reminder for late March every year and file the renewal first thing.
Kashvi Pathak runs a handloom export unit in Bhadohi.
She ships home textiles to a buyer in Germany. In April 2026 she logs in to the GST portal, files Form RFD-11 for FY 2026-27, names two witnesses, and signs with EVC. Her ARN is generated the same day, so her April export invoices go out IGST-free, keeping her working capital free for raw material.
In one consignment, a logistics delay pushes the actual export past the 3-month window from the invoice date. Because the goods did not leave India in time, the LUT facility is withdrawn for that invoice. Kashvi pays the applicable IGST plus 18% interest under Section 50 from the invoice date, within 15 days of the deadline expiring, and avoids a recovery demand. The takeaway she now drills into her team: every export invoice gets a 3-month calendar alert.
No. Filing Form RFD-11 on the GST portal is free. There is no statutory fee for furnishing a Letter of Undertaking.
One financial year. It expires on 31 March and must be re-filed for the next year before your first export of that year. It does not renew automatically.
With an LUT you export without paying IGST upfront, so no money is blocked. The alternative is to pay IGST on the export and claim it back as a refund later, which ties up working capital until the refund is processed.
Only exporters who have been prosecuted for an offence where the tax evaded exceeds ₹2.5 crore under the CGST Act, IGST Act, or earlier laws. They must furnish a bond with a bank guarantee instead of a self-declared LUT.
If goods are not exported within 3 months of the export invoice date, the LUT facility is withdrawn. You must pay the applicable IGST plus interest under Section 50 (generally 18% per annum) from the invoice date, within 15 days of the deadline expiring.
Yes. For services, the condition is that the foreign exchange payment must be realised within 1 year from the date of the export invoice. If it is not, the LUT facility is withdrawn and IGST with interest becomes payable.
Yes. Form RFD-11 requires the details of two independent witnesses (name, occupation, and address). This is a mandatory field on the GST portal.
Yes. You can sign with either a DSC or an EVC (electronic verification code sent to your registered mobile and email). Both are accepted on the GST portal.