Taxation & Compliance
Posted on Dec 24, 2025
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If you are involved in any of the export business from India, be it any freelancing work or a Saas company selling subscriptions globally, or a business exporting goods globally, then you will frequently come across the term LUT while handling GST compliance.
LUT is not just another GST compliance form. LUT plays an important role in determining how you pay tax on exports, how quickly you receive international payments, and how much working capital remains free in your business. Filing LUT correctly can save exporters from unnecessary tax payments and long refund cycles.
This detailed blog will explain to you the LUT full form, its meaning under GST, who can apply for LUT, why it is required, and a detailed step-by-step process to apply and download the LUT certificate in India.
Quick Overview: LUT Certificate in GST
What is the full form of LUT? LUT stands for letter of undertaking
What is LUT in GST? A declaration allowing exporters to export without paying iGST.
Who needs LUT? Indian exporters of goods and services.
Why is LUT required? LUT is required to avoid upfront IGST payment and refund delays.
Where to apply for LUT? LUT can be applied on the GST portal (India).
What is the validity of LUT in India? LUT is valid for one financial year in India (April-March).
This overview is especially useful for Indian exporters looking for quick answers before diving into the detailed explanation.
What is LUT in GST?
LUT in GST stands for a letter of undertaking. It is a formal declaration submitted by exporters to the Indian government through the GST portal. By filing LUT, an exporter confirms that they will comply with all GST laws.
Under GST, exports are considered zero-rated supplies. This means exports are taxable, but the tax rate is zero. However, to claim its benefit, exporters must choose between two options:
Export with payment of IGST and later apply for a refund, or
Export without payment of IGST by submitting an LUT
Most exporters prefer LUT because paying IGST first and then waiting for refunds can block funds for months. For businesses with regular exports, this can severely affect cash flow.
LUT Full Form & Meaning in GST
The LUT full form is a letter of undertaking. In simple terms, a letter of undertaking is a promise made by the exporter to the government. Through LUT, the exporter undertakes that:
Goods will be exported within the time limit specified under the GST law.
Services will be provided and payment received in convertible foreign exchange
Any tax liability arising later will be paid along with interest.
Many users search specifically for “LUT full form in GST” OR “what is the full form of LUT”. From a compliance perspective, LUT is not a physical certificate issued by the GST department. Instead, it is an electronically acknowledged document, which becomes valid immediately after submission.
Why is LUT required under GST?
LUT is required by the exporters who wish to export without paying the IGST, as the GST law mandates a formal declaration by the Indian exporters. Without LUT, the exporter must pay IGST on every export invoice and then apply for a refund.
Why this matters:
Cash flow protection: Paying IGST upfront ties up capital
Refund delays: Refund often takes time and require follow-ups
Compliance clarity: LUT ensures exports are legally zero-rated
For service exporters in India, such as IT professionals, consultants, digital marketers, and Saas founders, the LUT document simplifies GST compliance by removing unnecessary tax payments and paperwork.
Who can apply for LUT in GST?
It is not necessary that every GST-registered person in India automatically qualifies to file LUT. The government has defined clear eligibility rules to ensure only compliant taxpayers use this facility.
Exporters of goods from India
Indian businesses that are involved in manufacturing and trading goods and exporting them outside India are eligible for LUT. This included MSMEs, manufacturers, and merchant exporters who ship goods overseas.
Exporters of services from India
LUT applicants in India comprise a large unit of service exporters. This category includes:
IT and software service provider
Saas companies offering subscriptions to foreign customers
Consultant, agencies and digital marketers
Professional services like accounting, design and development
Basically, as long as the services or goods are provided to the foreign clients and payment is received in foreign currency, an LUT can be filed.
Freelancers working with foreign clients
Freelancers often assume that LUT is only for large businesses, which is incorrect. Individual freelancers registered under GST and providing services to overseas clients are also eligible. LUT helps freelancers avoid paying IGST on export invoices.
Startups and MSMEs
Startups and small businesses engaged in export businesses benefit a lot from LUT. This is because it reduces compliance burden and improves cash flow during early growth stages.
Who is not eligible for LUT?
Taxpayers who have been prosecuted for tax evasion exceeding INR 2.5 crore under GST or earlier laws are not eligible to file LUT. Such taxpayers are required to submit a bond instead.
If you meet the eligibility criteria, LUT filing is completely online and does not require manual approval in most cases.
What are the documents required for the LUT certificate?
One of the key advantages of LUT is minimal documentation. Since the process is digital, most details are auto-fetched from your GST profile.
Common information required for LUT includes:
GSTIN and registered business details
PAN details of the business or proprietor
Authorised signatory information
Witness details (name, address, occupation)
No physical documents or bank guarantees are required for LUT, making it far simpler than bond filing.
Step-by-Step Process to Apply for LUT in GST Portal
Applying for LUT involves a series of steps on the GST portal. Understanding each step helps avoid errors and delays. Here are the steps required to apply for LUT in GST:
Step 1: Log in to the GST Portal
Log in to the GST portal using your GST credentials. Understanding each step helps in avoiding errors and delays.
Step 2: Navigate to the LUT Section
From the dashboard, go to services-user services- furnish letter of undertaking (LUT). This section is dedicated to LUT filing.
Step 3: Select the Financial Year
Choose the financial year for which you are applying. LUT must be filed separately for each financial year, even if business details remain unchanged.
Step 4: Fill LUT Details Carefully
Review exporter declarations, enter witness details, and verify all information. Accuracy here is important for future audits and compliance checks.
Step 5: Submit Using DSC or EVC
Submission can be completed using a Digital Signature Certificate (DSC) or an OTP-based Electronic Verification Code (EVC).
Step 6: ARN Generation and Acknowledgement
Once submitted, an ARN is generated. In most cases, LUT is approved instantly without officer intervention.
How to download the LUT certificate in GST?
After applying for the LUT, exporters often look for how to download the LUT certificate in GST. This is useful for records or sharing with banks. Here is how you can download it:
First step is to log in to the GST portal using your GST credentials.
Then, go to the LUT section in the GST portal.
After going to the LUT section, select the relevant financial year.
Then, view the submitted LUT in the relevant financial year.
Download the acknowledged PDF of LUT.
This document acts as proof of LUT submission, and it can be downloaded multiple times if needed.
A few important points to know about LUT
A LUT certificate is valid for one financial year only, from April 1st to March 31st.
The LUT certificate must be renewed every year.
An expired LUT can lead to export tax liability.
Filing for LUT in the early financial year is recommended to avoid any delays and penalties. This is because many exporters forget to renew the LUT, leading to compliance issues.
Concluding Thoughts
Understanding the LUT full form and its practical importance under GST is essential for Indian exporters. LUT simplifies exports, improves cash flow, and reduces compliance friction, especially for businesses operating globally.
As international trade is growing every day, exporters also need a reliable platforms that understand compliance, foreign payments, and operational efficiency.
Infinity is a modern fintech payment platform, built with modern exporters in mind. Infinity helps businesses manage global payments smoothly while staying aligned with regulatory regulations.
So, choosing the right payment platform and filing the LUT on time allows Indian exporters to focus on growth rather than paperwork.
FAQs on LUT in GST
What is the full form of LUT in GST?
The full form of LUT is Letter of Undertaking.
Is LUT mandatory for exporters?
Yes, if you are exporting without IGST payment, then LUT is mandatory.
Can freelancers apply for LUT?
Yes, freelancers in India who are registered with GST can file LUT.
How long does LUT approval take?
LUT is usually approved instantly after submission on the GST portal.
Is LUT required every year?
Yes, LUT must be filed annually.
Can LUT be downloaded anytime?
Yes, LUT can be downloaded anytime through the GST portal.
