LUT (Letter of Undertaking)
LUT (Letter of Undertaking) is a document filed by exporters who want to export goods or services without paying GST.
Instead of paying GST and claiming a refund later, they undertake (promise) to comply with all GST rules and conditions for exports. This saves time and improves cash flow.
Who Can Use LUT?
Any registered person under GST can apply for LUT, except those who have been prosecuted for tax evasion above a certain threshold (like ₹250 lakh in India).
Applicable for:
- Export of goods
- Export of services
- Supplying to SEZs (Special Economic Zones)
Benefits of LUT
- No upfront GST payment on exports.
- Avoids blocking of working capital.
- Easier and faster than claiming refund after paying tax.
Important Conditions
- Exports must be completed within 3 months from the invoice date (for goods).
- For services, the payment must be received in foreign exchange within the prescribed time.
- If conditions aren’t met, GST becomes payable along with interest.
How to File LUT (India-specific)
- Go to the GST Portal – https://www.gst.gov.in
- Login with your credentials.
- Go to Services > User Services > Furnish Letter of Undertaking (LUT)
- Fill in the necessary details.
- Upload any supporting documents (if required).
- Use DSC or EVC to submit the form.
- Download the acknowledgment/reference number for records.
Validity
- LUT is valid for one financial year.
- Must be renewed each year before it expires (usually April 1st).