Letter of Undertaking
LUT, Form GST RFD-11
A Letter of Undertaking is a declaration filed on the GST portal that lets an exporter ship goods or services without paying IGST upfront, instead of paying it and claiming a refund.
Exports are zero-rated, but there are two ways to get there. Either you pay IGST on the export and claim it back, which ties up working capital for as long as the refund takes, or you file an LUT and simply do not pay it. For any exporter with regular shipments the second is obviously better, and the only cost is remembering to file.
That is the catch. An LUT is valid for one financial year and must be filed afresh each year. An exporter who ships in April without having filed the new LUT has made a taxable supply, and fixing that after the fact is considerably more work than the two minutes filing would have taken.
Most exporters qualify. The facility can be refused where there has been a significant tax evasion prosecution, in which case a bond with a bank guarantee is required instead.
Key facts
- Filed as Form GST RFD-11 on the GST portal.
- Valid for one financial year and must be renewed annually.
- Allows export without payment of IGST; the alternative is pay-and-refund.
- Covers exports of goods and services, and supplies to SEZ units.
- A bond with bank guarantee is required instead where the LUT facility is not available.
Who this affects
Every GST-registered exporter of goods or services, and suppliers to SEZ units.
How YarnTally handles it
Recording an LUT automatically schedules a compliance deadline 30 days before it expires, which is the failure this feature exists to prevent.
See what else it doesReviewed September 2026. This is general information about how these rules work, not tax or legal advice, and thresholds and due dates do change. Check your own position with your chartered accountant before acting on it.