🧾 Export under GST – With LUT & Without LUT Explained for Exporters

Introduction: Export under GST Made Simple

If you are exporting goods or services from India, understanding export under GST is essential. The GST framework offers two methods — Export with LUT (Letter of Undertaking) and Export without LUT (with IGST payment). Both allow you to claim refunds, but each affects cash flow and compliance differently. Let’s explore both in detail.

1. Export with LUT under GST (Letter of Undertaking)

Exporting under LUT allows businesses to make exports without paying IGST upfront. It’s the most common and preferred option for regular exporters.

Key Benefits

• ✅ No IGST payment required: Exporters can ship goods and services without paying IGST at the time of export.
• 🧾 File LUT online in Form RFD-11: The LUT must be filed every financial year via the GST portal.
• 💰 Claim refund of unutilized Input Tax Credit (ITC): You can get a refund on ITC accumulated from inputs or input services used for export.
• 🚫 No fund blockage: Helps maintain better cash flow and working capital.

Ideal for: Regular exporters who want smoother operations and minimal fund blockage.

2. Export without LUT under GST (With IGST Payment)

If you haven’t filed an LUT or are exporting for the first time, you can still proceed under export without LUT by paying IGST on your export invoice under GST. The refund is then claimed through the shipping bill.

Key Highlights

• 💸 IGST must be paid on export invoice: Payment is made at the time of export.
• 🧾 Refund through shipping bill: The shipping bill automatically acts as your IGST refund application.
• ⚡ Faster refund processing: Customs typically process IGST refunds quicker than ITC refunds.
• 🕒 Suitable for new exporters: Ideal for those who missed filing LUT or exporting for the first time.

Ideal for: New exporters or businesses preferring faster refunds even with temporary fund outflow.

3. Difference Between LUT and IGST Export

4. How to File LUT Online in GST Portal (Step-by-Step)

Filing an LUT under GST is simple and can be completed in a few minutes.

1. Login to the GST Portal: Visit www.gst.gov.in.
2. Navigate to Services → User Services → Furnish Letter of Undertaking (LUT).
3. Select the financial year.
4. Fill in exporter details and upload the signed LUT document.
5. Submit with Digital Signature Certificate (DSC) or EVC.
6. Download and save the acknowledgment for your records.

✅ Pro Tip: File your LUT before the start of each financial year to avoid delays in exports.

5. GST Refund Process for Exporters

Depending on the export type, refunds can be claimed in two ways:

• Under LUT: Claim refund of unutilized ITC through the GST portal (Form RFD-01).
• Without LUT (IGST route): Refund auto-processed through Customs based on your shipping bill and EGM data.

Make sure all invoices, shipping bills, and GSTR filings are accurate to avoid delays.

6. Best Practices for Exporters under GST

• File LUT annually and track its validity.
• Keep all export invoices and shipping documentation in order.
• Maintain separate records for zero-rated supplies.
• Use GST-compliant accounting software for better reporting.
• Reconcile GSTR-1 and GSTR-3B returns regularly.

Conclusion

Whether you choose Export with LUT under GST or Export without LUT (with IGST payment), both are legitimate options for exporters. However, exporting under LUT helps maintain liquidity and reduces administrative effort. Exporting without LUT can be useful for new exporters who prefer faster refund processing through customs.

Stay compliant, keep your LUT updated, and manage your GST refunds efficiently for smooth export operations.

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