Exporters have a choice: pay IGST on exports and claim refunds, or file a Letter of Undertaking (LUT) and export without paying tax at all. For most service exporters and many goods exporters, the LUT wins.

What an LUT does

It is your undertaking to the department that you will complete exports as per the rules. With it in place, you invoice foreign clients without charging IGST — no tax outflow, no refund wait for that tax.

Key practical points

  • Annual renewal: an LUT covers one financial year — refile before each year begins
  • Invoice wording: export invoices must reference supply under LUT without payment of tax
  • Realisation matters: payment must be received within prescribed timelines (foreign exchange for services)
  • Input credit lives on: credit accumulating on your purchases can be claimed as refund separately

The common miss

Forgetting the annual renewal — then invoicing “under LUT” without a valid one. A calendar entry (or a firm that tracks it) prevents an awkward liability.

We file and renew LUTs for exporters as routine — import-export services · get in touch.