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What is a letter of undertaking (LUT)? Meaning, benefits, format, and application process
Exporters must file a Letter of Undertaking on the GST portal to export goods without paying IGST. Learn more about its usage, working, and example in this blog.
Exporting from India comes with exciting opportunities—but also important regulatory requirements. One common challenge businesses face is the upfront payment of Integrated Goods and Services Tax (IGST) on exports. Fortunately, there’s a provision designed to ease this pressure: the letter of undertaking, or LUT.
Filing an LUT allows businesses to export goods or services without paying IGST at the time of shipment. Instead of waiting for tax refunds or tying up working capital, exporters can focus on fulfilling orders and scaling operations more efficiently. Whether you're new to exporting or looking to streamline your processes, understanding what an LUT can can streamline your export compliance. This blog guides you through the essentials about an LUT, how to apply for it, and its benefits.
Filing an LUT allows businesses to export goods or services without paying IGST at the time of shipment. Instead of waiting for tax refunds or tying up working capital, exporters can focus on fulfilling orders and scaling operations more efficiently. Whether you're new to exporting or looking to streamline your processes, understanding what an LUT can can streamline your export compliance. This blog guides you through the essentials about an LUT, how to apply for it, and its benefits.
What is a letter of undertaking (LUT)?
A letter of undertaking (LUT) is a formal document that allows Indian businesses to sell goods internationally or supply them to Special Economic Zones (SEZs) without paying Integrated Goods and Services Tax (IGST). By submitting an LUT, exporters commit to fulfilling their obligations under the GST law and can avoid the financial strain of upfront tax payments.1
What is a letter of undertaking (LUT) in GST?
In the context of GST, an LUT is a declaration filed on the GST portal, enabling exporters to carry out zero-rated supplies without IGST payment. It is valid for twelve months and streamlines tax compliance for exporters by eliminating the need for IGST refunds.2
Benefits of letter of undertaking (LUT)
Filing an LUT can unlock multiple advantages for exporters, such as:
No IGST payment on exports
Exporters can supply goods or services without paying IGST, helping preserve liquidity and easing working capital pressure.
No refund hassles
Instead of paying tax first and claiming a refund later, an LUT allows direct tax exemption—saving time, paperwork, and potential delays.
Faster order fulfillment
With no tax-related delays at the point of dispatch, shipments move faster, improving delivery timelines and customer satisfaction.
Competitive pricing
LUT-based exports reduce cost overheads, helping businesses offer more competitive pricing in global markets.
Better cash flow management
LUT removes the need to block capital in taxes and refunds.3
Pro tip
Who should apply for letter of undertaking (LUT)?
Any GST-registered person who intends to supply goods or services for export without paying IGST, or supply goods or services to a SEZ unit, can apply for an LUT. An LUT is especially useful for regular and bulk exporters.4
Usage of letter of undertaking (LUT)
The LUT is valid for one financial year and must be renewed annually. It can be used to:
● Export goods or services without payment of IGST
● Supply goods to SEZ units or developers without tax
● Avail zero-rated supply benefits under GST
● Meet compliance requirement for GST-registered exporters.5
Contents of a letter of undertaking (LUT)
The following details are included in an LUT:
● Information about the exporter: Name, address, and GSTIN of the exporter.
● Validity period: An LUT is typically valid for the duration of a financial year.
● Export transaction specifications: Invoice number and date, description of goods or services (including value, quantity, and unit), destination country, and any other relevant information.
● Declaration: Confirmation of adherence to GST regulations, signed and dated by an authorized person, with the place of signing specified.6
Sample format of letter of undertaking (LUT)
An LUT typically includes:7
Eligibility criteria for a letter of undertaking
An LUT) can be submitted by any registered taxpayer engaged in the export of goods or services. However, those who have been prosecuted or convicted for tax evasion or other offences under the CGST Act, IGST Act, or any applicable law are not eligible to file an LUT. In such cases, they are required to submit an export bond instead.8
Documents required to file letter of undertaking (LUT) under GST
Some of the documents required to file an LUT are:
● LUT cover letter signed by an authorized signatory
● PAN card of export business
● IEC certificate
● GST registration certificate
● Cancelled cheque of the exporter’s current account
● GST RFD 11 form
● Copy of GST registration
● KYC of the authorized person
● Authorized letter granting power to the authorized signatory.9
● PAN card of export business
● IEC certificate
● GST registration certificate
● Cancelled cheque of the exporter’s current account
● GST RFD 11 form
● Copy of GST registration
● KYC of the authorized person
● Authorized letter granting power to the authorized signatory.9
Step-by-step process to file a letter of undertaking
Here’s how you can file an LUT through the GST portal:
Step 1: Log in to the GST portal:
Visit the GST portal and log in using your credentials (username and password).
Step 2: Navigate to LUT application:
Go to Services > User Services > Furnish Letter of Undertaking (LUT). If you’ve already filed LUT in previous years, you’ll see previous submissions listed there.
Step 3: Select the financial year:
Choose the financial year for which you want to renew the LUT—e.g., 2025–26. This is crucial to ensure your application is valid for the upcoming export period.
Step 4: Upload documents:
You will be prompted to attach supporting documents like the previous LUT, GST certificate, PAN, etc. Ensure all documents are in PDF format and within the specified size limits.
Step 5: Fill the declaration:
Tick the checkboxes to declare that you will export within the permitted time, comply with GST laws, and pay applicable tax with interest if obligations are not met.
Step 6: Add witness details:
Add the names and addresses of two witnesses. This is mandatory and must be accurate for the LUT to be considered valid.
Step 7: Sign and submit:
Use either Digital Signature Certificate (DSC) or EVC (OTP via Aadhaar) to sign the application. Click “Submit.”
Step 8: Download the acknowledgment:
Once submitted, an acknowledgment number will be generated. You can also download the approved LUT from the portal for record-keeping.10
Key pointers about LUT bond in GST
Here are some essential details about LUTs under GST:
Validity period:
A LUT is valid for one year from its submission date.
Conditional acceptance:
If an exporter fails to adhere to the terms of an LUT, their privileges could be revoked, and they may be asked to provide an export bond.
Export bond for GST:
Those who do not qualify for an LUT can provide an export bond instead. This bond needs to be submitted along with a bank guarantee. It should cover the estimated tax liability as assessed by the exporter.
Submission form:
An LUT should be filed using the official GST RFD-11 form. Authorized personnel such as the managing director, company secretary, or partners of a firm can submit this form.
Bank guarantee for export bond:
Export bonds need to include a bank guarantee, which should not exceed 15% of the bond amount. However, the jurisdictional GST Commissioner may waive this requirement based on the exporter’s trade history.11
Conclusion
For Indian exporters, the letter of undertaking is an important compliance document that can enhance operational efficiency, maintain cashflow, and help scale exports seamlessly. Filing it on time each year ensures you stay compliant while freeing up capital to focus on growth.
Try Export Navigator: A one-stop dashboard for export documentation
Export Navigator is Amazon's one-stop export compliance dashboard that provides guidance on compliance across six key areas — export registration, product documentation, shipping documentation, tax documentation, payment reconciliation, and export incentives.
Use the dashboard to understand regulatory requirements for your business and get support from third-party service providers to obtain necessary documents. Export Navigator is available to all Indian exporters, including those not registered on Amazon.
Use the dashboard to understand regulatory requirements for your business and get support from third-party service providers to obtain necessary documents. Export Navigator is available to all Indian exporters, including those not registered on Amazon.
Amazon Global Selling: Easy e-commerce exports and hassle-free shipping
If you are a business owner and you want to sell your products to the world, Amazon Global Selling enables you to list and sell ‘Made in India’ products on 18 Amazon global marketplaces. As an e-commerce export program, Amazon Global Selling provides support and guidance at every step of your export journey, connecting you to Amazon’s Service Provider Network for tailored compliance, payments, and logistics support.
Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfillment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.
Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfillment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.
Frequently Asked Questions
1. What is the purpose of a letter of undertaking?
A letter of undertaking allows exporters to ship goods without paying Integrated Goods and Services Tax (IGST) upfront. Under GST, exports are generally subject to IGST, which exporters can later reclaim through a refund. However, by filing an LUT, exporters can bypass the tax payment entirely, eliminating the need for refunds.
2. What is the validity of a letter of undertaking?
The validity of a LUT is one year, i.e., the financial year in which it has been filed.
3. What happens if a tax official does not process an LUT application?
If a tax official does not process an LUT application or does not issue a notice for clarification within three working days, the application will be deemed approved. The status of the LUT application changes to ‘Deemed Approved.’
4. Who signs the LUT application?
The primary authorized signatory or any other authorized signatory must sign and file the verification with DSC/EVC. An authorized signatory can be the operating partner, managing director, proprietor, a person authorized by the working partner, or the Board of Directors of the company or proprietorship.
5. What happens when the exporter fails to furnish the LUT?
If an exporter fails to supply the LUT, they will have to either furnish an export bond or pay the IGST upfront.
6. When should you apply for a letter of undertaking?
You should apply for LUT at the beginning of every financial year or before initiating any export transaction that qualifies for zero-rated supply. The LUT must be filed and approved in advance to avail tax exemption benefits.
Published on May 13, 2022.
Updated on Aug 05, 2025
Sources:
1. https://tax2win.in/guide/letter-of-undertaking-lut-under-gst
2. https://www.indiafilings.com/learn/export-bond-gst/
3. https://www.bajajfinserv.in/gst-lut-explained
4. https://www.infinityapp.in/blog/what-s-a-gst-letter-of-undertaking-(lut)
5. https://tutorial.gst.gov.in/userguide/refund/Furnishing_of_Letter_of_Undertaking_for_Export_of_Goods_or_Services.htm
6. https://vakilsearch.com/blog/letter-of-undertaking-lut-gst/
7. https://www.legalwiz.in/blog/filing-and-renewal-of-lut-made-online-gst
8. https://www.legalwiz.in/blog/filing-and-renewal-of-lut-made-online-gst
9. https://www.indiafilings.com/gst-lut
10. https://www.indiafilings.com/learn/how-to-file-and-renew-your-lut/
11. https://www.indiafilings.com/learn/gst-lut-form-a-comprehensive-guide-for-exporters/
Updated on Aug 05, 2025
Sources:
1. https://tax2win.in/guide/letter-of-undertaking-lut-under-gst
2. https://www.indiafilings.com/learn/export-bond-gst/
3. https://www.bajajfinserv.in/gst-lut-explained
4. https://www.infinityapp.in/blog/what-s-a-gst-letter-of-undertaking-(lut)
5. https://tutorial.gst.gov.in/userguide/refund/Furnishing_of_Letter_of_Undertaking_for_Export_of_Goods_or_Services.htm
6. https://vakilsearch.com/blog/letter-of-undertaking-lut-gst/
7. https://www.legalwiz.in/blog/filing-and-renewal-of-lut-made-online-gst
8. https://www.legalwiz.in/blog/filing-and-renewal-of-lut-made-online-gst
9. https://www.indiafilings.com/gst-lut
10. https://www.indiafilings.com/learn/how-to-file-and-renew-your-lut/
11. https://www.indiafilings.com/learn/gst-lut-form-a-comprehensive-guide-for-exporters/
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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.
*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.
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