Last updated: 20 April 2026. A Letter of Undertaking (LUT) in Form GST RFD-11 lets you export goods or services without paying IGST upfront. It is valid for one financial year only, so every exporter has to renew it for FY 2026-27 by filing a fresh RFD-11 on the GST Portal. The practical cutoff to file before the financial year began was 31 March 2026. If you missed that, you are not locked out, but every export you make until you file will carry an IGST cost at the applicable rate (typically 18% for most services) plus interest until you recover it through a refund.
Applicability Note: This guide is based on Rule 96A of the CGST Rules, Notification No. 37/2017-Central Tax, Circular No. 8/8/2017-GST, and Circular No. 40/14/2018-GST as in force on 20 April 2026. The eligibility conditions, format of LUT, and online filing process can change through notifications. Verify the current position on gst.gov.in or with a GST professional before acting.
Who should care?
- Exporters of goods to any country outside India
- Service exporters (IT, consulting, design, freelancers billing foreign clients)
- Suppliers to Special Economic Zone (SEZ) units or developers
- Anyone who filed an LUT last year and has not yet filed for FY 2026-27
1. What an LUT Actually Does
Exports under GST are treated as zero-rated supply under Section 16 of the IGST Act. Zero-rated is not the same as exempt. The tax rate is nil, but you still get to claim Input Tax Credit on inputs used for the export. The law gives you two routes to make a zero-rated supply:
| Route | How It Works | Cash Flow Impact |
|---|---|---|
| With LUT (RFD-11) | Export without paying IGST. Claim ITC refund on inputs separately. | No working capital blocked on the export itself |
| With IGST payment | Pay IGST on the export invoice, then claim refund of the IGST paid. | Working capital blocked until refund is credited, typically several weeks to a few months |
Almost every regular exporter chooses the LUT route. The only tax cost on a single export is then the GST you may have already paid on inputs, which is a smaller number and is also refundable.
2. Who Can File an LUT
Notification No. 37/2017-Central Tax dated 4 October 2017 extended the LUT facility to any registered person who intends to make a zero-rated supply, with one exception. You cannot file an LUT if you have been prosecuted for tax evasion of ₹250 lakh (₹2.5 crore) or more under the CGST Act, the IGST Act, or any earlier indirect tax law.
If that disqualification applies, you have to furnish a bond instead of an LUT, supported by a bank guarantee of up to 15% of the bond amount. The jurisdictional Commissioner retains discretion to reduce or waive this guarantee in specified cases (for example, exporters registered with a recognised Export Promotion Council, as clarified under Circular No. 8/8/2017-GST). For everyone else, the LUT is the standard route.
3. Before You File: What to Keep Ready
Filing RFD-11 itself is a 5-minute job. The friction is usually in the prerequisites. Have these ready before you log in:
- Active GSTIN credentials for the portal
- Valid DSC (Class 3) for companies and LLPs, or EVC access for proprietorships and partnerships
- Board resolution or authorisation letter designating the signatory (mandatory for companies, LLPs, and partnerships)
- Active Import-Export Code (IEC) from DGFT for goods exporters. Service exporters typically do not need an IEC but must ensure foreign exchange receipts are FEMA-compliant.
- Details of two independent witnesses: names, occupations, and full addresses with PIN codes
- Previous year's LUT copy (optional, only for renewals) in PDF or JPEG under 2 MB
4. How to File RFD-11 on the GST Portal: Step by Step
- Log in to gst.gov.in with your GSTIN credentials
- Go to Services → User Services → Furnish Letter of Undertaking (LUT)
- Select the financial year. For the current renewal, pick 2026-27
- If you filed an LUT last year, upload the previous year's LUT in PDF or JPEG (max 2 MB). This step is optional but recommended for record-keeping.
- Tick the three self-declaration boxes confirming you will complete the export within the prescribed timelines
- Add the name, address, and occupation of two independent witnesses
- Enter the place of filing
- Submit using DSC (mandatory for companies and LLPs) or EVC (allowed for proprietorships and other entities)
The system generates an Application Reference Number (ARN) instantly. As clarified by Circular No. 40/14/2018-GST, the LUT is deemed to be accepted on ARN generation. There is no separate physical acknowledgment from the department, and you do not need to wait for any approval to start exporting. In rare cases the jurisdictional officer may raise a clarification query — this is the exception, not the norm, so don't panic if it happens.
5. What If You Missed the 31 March 2026 Deadline
This is where most exporters lose money quietly. Strictly speaking, GST law does not fix a hard statutory deadline — it only requires the LUT to be filed before your first zero-rated supply of the year. In practice, 31 March is the recommended cutoff because it ensures cover from Day 1 of the new year. There is no penalty for filing late, but the consequence is built into the structure of the law itself: an LUT is only valid from the date of its filing. Exports made before the new LUT is filed cannot claim shelter under the previous year's LUT. Each of those invoices is treated as a regular taxable supply.
The fix has three parts:
- File the new RFD-11 immediately for FY 2026-27. From the date of ARN, all your future exports are covered.
- Pay IGST on the gap-period exports at the applicable rate (5%, 12%, 18% or 28% depending on HSN/SAC). Add interest under Section 50(1) at 18% per annum from the date of the export invoice until the date you actually pay the IGST.
- Claim refund of the IGST paid under Form RFD-01. This is the standard refund route for IGST paid on zero-rated supplies, and the principal amount is fully refundable. The 18% interest you paid, however, is not.
Practical impact — goods: If you exported goods worth ₹50 lakh in April 2026 before filing the LUT, and the applicable IGST rate is 18%, you will need to pay ₹9 lakh in IGST. Even if you claim the full ₹9 lakh back as a refund, the 18% interest accruing on that amount until it is paid is a real out-of-pocket cost.
Practical impact — services: A freelance developer who raised a ₹20 lakh invoice to a US client on 5 April 2026 before filing the LUT owes 18% IGST (₹3.6 lakh) upfront, plus interest running from the due date of April 2026 GSTR-3B until the IGST is actually paid. The ₹3.6 lakh principal comes back via RFD-01, but the interest is sunk. The longer you delay filing the new LUT, the larger this leak gets.
6. Conditions You Must Meet After Filing
The LUT is not just a one-line declaration. You undertake three specific obligations under Rule 96A of the CGST Rules:
- Goods exporters: Export the goods out of India within 3 months from the date of the export invoice. An extension can be sought from the jurisdictional Commissioner.
- Service exporters: Receive the export proceeds in convertible foreign exchange (or in INR where permitted by the RBI) within 1 year from the date of the export invoice.
- SEZ supplies: The supply must actually reach the SEZ unit or developer for authorised operations.
If you breach any of these conditions — for example, if a foreign customer does not pay for an exported service within a year — you must pay the IGST that would otherwise have been payable on that invoice, along with interest under Section 50(1), within 15 days of the expiry of the prescribed period. If you fail to pay, the LUT facility itself is deemed withdrawn under Circular 8/8/2017-GST until you clear the dues, which means further exports in the interim can only be made on payment of IGST or under bond with bank guarantee.
Don't forget FEMA runs in parallel. Rule 96A's 1-year window is a GST timeline. FEMA has its own timelines for realisation and repatriation of export proceeds (historically 9 months for goods, extended in specific periods and for specific routes such as IFSC-based accounts). A service exporter who collects payment in month 13 may be within GST's 1-year window if the Commissioner grants an extension, but can still be in FEMA breach territory. Satisfying Rule 96A does not automatically satisfy FEMA, and vice versa. Check both regimes before agreeing to delayed payment terms with a foreign client.
7. Common Mistakes Exporters Make
| Mistake | Why It Costs You |
|---|---|
| Continuing to use last year's LUT after 1 April | Each new financial year needs a fresh LUT. Last year's cover expires on 31 March. |
| Filing the LUT after raising the first export invoice of the year | That invoice is not LUT-protected, so IGST + interest become payable |
| Treating the LUT as proof of export | The LUT only allows export without IGST; you still need shipping bills, BRC/FIRC, and FX realisation evidence |
| Skipping the witness details | Without two independent witnesses, the form will not submit on the portal |
| Assuming LUT and FEMA timelines are the same | GST gives service exporters 1 year to realise proceeds; FEMA's window is separate and usually tighter |
| Assuming the LUT covers deemed exports too | Deemed exports under Section 147 (supplies to EOU, against Advance Authorisation, etc.) follow a separate refund mechanism and cannot be made under LUT/Bond |
8. Key Takeaways
- LUT in Form RFD-11 is mandatory before exporting without IGST, for both goods and services
- Validity is one financial year only; you must refile every year for fresh cover
- Deemed approval on ARN generation per Circular 40/14/2018-GST. No waiting for departmental sign-off
- If you missed the start-of-year filing, file now and pay IGST + 18% interest on gap-period exports, then claim the IGST back via RFD-01
- Goods must leave India within 3 months of the invoice; service exporters have 1 year under Rule 96A to receive payment in convertible FX — but check FEMA timelines separately
- Eligibility is open to all registered exporters except those prosecuted for tax evasion of ₹2.5 crore or more
Frequently Asked Questions
Is LUT mandatory for service exports?
It is mandatory only if you want to export services without paying IGST. The alternative is to pay IGST on every export invoice and then claim a refund. Almost every regular service exporter files an LUT to avoid blocking working capital.
How long is an LUT valid?
One financial year. An LUT filed for FY 2026-27 covers exports from the date of filing up to 31 March 2027. A fresh RFD-11 must be filed for each new financial year.
Can I file an LUT after my first export of the year?
Yes, but the LUT only protects exports made on or after the date of its filing. Any export invoice raised before the LUT date will attract IGST plus 18% interest under Section 50(1), with the IGST refundable through Form RFD-01.
Do freelancers exporting services need an LUT?
Yes, if they are GST-registered and want to invoice foreign clients without paying IGST. A freelance designer or developer billing a US client in USD is making a zero-rated supply and the LUT route is usually the most efficient.
Does the GST LUT timeline satisfy my FEMA obligations?
No. Rule 96A sets timelines for GST purposes (3 months for goods, 1 year for service proceeds). FEMA has its own realisation and repatriation timelines administered by the RBI. Both regimes apply independently, so you need to satisfy each on its own terms.
What happens to the old LUT after the financial year ends?
It simply lapses on 31 March. There is no formal closure required, but exports made on or after 1 April need to be covered by the new year's LUT.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. GST and FEMA rules are subject to frequent changes through notifications and circulars. Please consult a qualified tax professional or verify the current provisions on the official GST portal (gst.gov.in) before making any compliance decisions.
Have a specific question about your LUT filing or export refund? Our GST experts can help → gstconsultancy.com