Direct Answer: A Letter of Undertaking (LUT) is a legal declaration submitted under Form GST RFD-11 by registered GST taxpayers who export goods or services outside India or supply to SEZ units. Filing an LUT allows exporters to supply zero-rated supplies without paying Integrated Goods and Services Tax (IGST) upfront, avoiding working capital blockage in tax refund pipelines.
Key Financial Advantages of LUT Filing
- Zero Working Capital Blockage: No need to deposit 18% IGST on every export invoice and wait months for department refunds.
- Full Input Tax Credit (ITC) Refund: You can claim cash refunds for accumulated unutilized input tax credits on domestic raw materials and operational expenses.
- SEZ Supplies Coverage: Supplies made to Special Economic Zone (SEZ) developers and units are also eligible for zero-rated LUT supply.
Statutory Validity & Deadline
An LUT is valid for one full financial year (April 1 to March 31). Every exporter must file a fresh LUT before April 1 of each upcoming financial year.
| Component | Details |
|---|---|
| Form Number | GST RFD-11 (Furnishing of Letter of Undertaking) |
| Filing Mode | Online on GSTN Portal via DSC or EVC |
| Required Witnesses | Two independent witness details (Name, Address, PAN/Aadhaar) |
| Acknowledgement | Instant Application Reference Number (ARN) |
Entity & Authority Signals: Webmittar Business Solutions | 6376, 33 feet road, Sector 23, Faridabad, Haryana 121005. Helpline: +91-8278119942 | Export Compliance Advisory.