Benefits of using GST LUT for filing GST returns

What are the Benefits of Using GST LUT?


A GST-registered taxpayer can export products or services without paying integrated GST (IGST) at the time of supply by using a LUT (Letter of Undertaking). It is crucial for companies that export goods or services to use LUT’s advantages. Using GST LUT for filing GST returns helps reduce the compliance burden and improves the ease of doing business for exporters. If a business has a valid GST LUT, it can export goods or services without paying IGST or having to apply for a refund.

What is the GST LUT?

GST LUT stands for “Goods and Services Tax Letter of Undertaking.” This is a document given to registered taxpayers who export products or services outside of India without paying integrated tax. Under rule 96 A, it must be provided in the form GST RFD 11, in which the exporter certifies that they will comply with all applicable GST requirements when exporting without paying IGST.

What are the Benefits of using GST LUT for filing GST returns?

A GST LUT (Letter of Undertaking) is a form that can be submitted by registered taxpayers to obtain an exemption from paying GST on exported goods or services. Below are a few benefits of using the GST LUT for filing GST returns:

  1. Increased cash flow: As the taxpayer is not required to pay taxes at the time of export, working capital is not blocked, which results in higher cash flow. All businesses aim to increase their cash flow, as it will help their overall results. Since businesses do not have to file regular returns for every export transaction, they can save on compliance costs, such as administration costs. This helps in reducing overall expenses and increasing cash flow.

  1. Simplified procedure: Submitting a GST LUT is a quick and easy procedure, and it doesn’t involve paying taxes upfront. For the taxpayer, this saves time and effort. The GST LUT makes the hectic procedure of import-export easier and simpler for the businesses that are engaged in it.

  1. Easy to obtain: The GST LUT is a basic online form that makes it simple for taxpayers to apply for and receive tax exemption on exports. It is a simple process that doesn’t require any specific guidance or instruction.

  1. Increased revenue: The ability to export goods and services without paying GST at the time of export can lead to expanding business opportunities and increased revenues. This helps in increasing overall revenue for the taxpayer.

  1. Avoidance of legal issues: By submitting a GST LUT, the taxpayer assures that they comply with all GST laws and regulations. This helps prevent any penalties or legal complications in the future.

  1. Tax exemption on exports: With a GST LUT, businesses can export goods or services without paying any GST at the time of export. This helps reduce the cost of goods or services, making them more competitive in the global market. As a result, businesses can attract more customers, leading to increased sales revenue.

  1. Faster refund: With the help of a GST LUT, businesses can get their refund claims processed faster. This helps reduce the time taken to get the refund, which leads to improved cash flow.


Below are the few frequently asked questions on GST LUT:

  1. What is LUT in GST?

A Letter of Undertaking (LUT) is a document that an exporter can file to furnish before exporting or importing products without paying IGST. If an exporter fails to file a LUT, they will have to pay IGST or export bond.

  1. How to file LUT online?

To file LUT online, log in to the GST portal and complete GST RFD- 11. LUT form is completed using GST RFD 11. The format includes information about exporters, self-disclosures, independent witnesses, etc. The form also needs a digital signature and approval from the jurisdictional officer.

  1. Who has to furnish a Letter of Undertaking?

All registered taxpayers with zero-rated supplies of goods or services are required to provide LUTs in GST RDF-11.

  1. What is the difference between LUT and Bond?

A LUT is a non-refundable document that an exporter can file for export or import before paying IGST. If an exporter does not file an LUT, he or she will have to pay IGST or export bond. An export bond is a guarantee that an exporter gives to the government that he or she will pay IGST if the LUT is not furnished.


In conclusion, a GST LUT (Letter of Undertaking) is a useful tool for companies engaged in exports to simplify their GST compliance process and improve their financial position. GST LUT is an attractive option for exporters who want to optimize their business operations and comply with GST regulations. GST LUT is very beneficial when filing GST returns.

Categories: GST GST Return
Dharmik Joshi: Dharmik Joshi is a student currently pursuing Business Management and Administration. He is passionate about presenting his thoughts in writing. Alongside his academic pursuits, Dharmik is actively involved in various extracurricular activities. He enjoys communicating with people and sharing things with others. He is more focused on the learning process and wants to gain more knowledge.
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