Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Check whether a registered exporter or SEZ supplier can use Form GST RFD-11 to supply without payment of IGST.
Check whether LUT can be used
LUT action path
LUT must ordinarily be furnished before export/SEZ supply without payment of IGST.
How This Is Calculated
A Letter of Undertaking (LUT) lets an exporter supply goods/services without paying IGST upfront (instead of paying and claiming refund later) — available to registered exporters (including SEZ supplies, which are treated as zero-rated) who haven't been prosecuted for tax evasion above a notified threshold. Without LUT eligibility, the exporter must pay IGST and claim a refund instead.
Frequently Asked Questions
What is the benefit of filing an LUT for exports?
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It lets an exporter supply goods or services without paying IGST upfront and then claiming a refund — instead, the export happens tax-free at the point of supply, improving cash flow by avoiding the wait for a refund.
Who is not eligible to file an LUT?
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Exporters who have been prosecuted for tax evasion involving amounts above a notified threshold are not eligible for LUT and must instead pay IGST on exports and claim a refund.
Does LUT apply to SEZ supplies too?
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Yes — supplies to SEZ units/developers are treated as zero-rated supplies similar to exports, and can also be made under LUT without upfront IGST payment, subject to the same eligibility conditions.
Source and review trail
Use the current official instrument, portal or regulator publication before acting.
The LUT permits the zero-rated supply without payment of integrated tax; it does not remove the export conditions. Furnish Form GST RFD-11 for the financial year, link it to the correct GSTIN and preserve proof that the goods or services met Rule 96A after supply.
Eligibility Confirm registration, zero-rated supply and the prosecution exclusion before choosing LUT.
Furnish File RFD-11 for the financial year through the current authorised route before the supply.
Perform Export goods or receive export-service consideration within the Rule 96A period, including an allowed extension.
Close Reconcile invoice, shipping/SEZ and receipt records; pay tax and interest promptly if conditions fail.
Law, rule and form map
Layer
Function
Evidence
IGST Act section 16
Identifies zero-rated supplies and the statutory routes available.
Export or authorised-operations facts and the law applicable to the supply date.
CGST Rule 96A
Imposes the bond/LUT conditions for supply without payment of integrated tax.
Invoice date, export date, foreign-exchange/INR receipt permitted by RBI, and any extension.
Form GST RFD-11
Records the bond or letter of undertaking and the signatory's undertaking.
Filed form, ARN/acknowledgement, financial year and authorised-signatory proof.
Refund rules
Govern refund of eligible unutilised input tax credit where claimed.
Return, statement, invoices, BRC/FIRC where applicable and refund acknowledgement.
Goods example
An exporter furnishes LUT and issues an export invoice, but the goods are not exported within three months and no further period has been allowed by the Commissioner. The LUT did not convert the supply into a permanently tax-free transaction. The taxpayer must apply the Rule 96A consequence and preserve later export evidence separately.
Services example
A consultant invoices an overseas customer under LUT. The bank receipt arrives after the normal one-year period but within a period allowed by RBI. The file should include the permission or banking evidence supporting that extended period; an invoice marked “export” is not enough.
Questions
Is the LUT valid forever? No, it is furnished for the financial year stated in the form. Does RFD-11 itself prove export? No; keep customs, SEZ endorsement and receipt evidence relevant to the supply. Can an excluded person use LUT? The prosecution threshold and current notification must be checked; where LUT is unavailable, use the legally available bond/payment route.
Check later amendments, extensions, notifications and the portal process for the supply date. This is professional education, not a filing acceptance.
Methodology, assumptions and sources
Scope: Checks eligibility to furnish a Letter of Undertaking (LUT) for zero-rated export/SEZ supplies without payment of IGST, and outlines the required action where the exporter is not LUT-eligible.
Calculation logic
Check LUT eligibility: available to any registered person intending to supply goods/services for export or to an SEZ, except a person who has been prosecuted for tax evasion of an amount exceeding ₹2.5 crore under the CGST Act, IGST Act or an existing law, per the current LUT eligibility rule.
Where eligible, confirm the LUT (Form GST RFD-11) can be furnished online for the financial year, permitting zero-rated supply without upfront IGST payment.
Where not eligible (due to the prosecution exclusion), flag that the exporter must instead pay IGST on the export/SEZ supply and subsequently claim a refund of that IGST paid, rather than supplying under LUT.
Inputs and assumptions
LUT eligibility criteria follow the current CGST Rules (Rule 96A) and related notifications/circulars.
LUT validity is for one financial year and must be furnished afresh (or the prior year's LUT continues to be valid until a new one is furnished, per current procedure) at the start of each financial year.
Exclusions and edge cases
Does not itself file Form RFD-11 — this is an eligibility and guidance check only.
Where LUT conditions are subsequently breached (e.g., export proceeds not realised within the prescribed period), the exporter becomes liable to pay IGST with interest — this ongoing-compliance monitoring is outside the scope of this one-time eligibility checker.