LUT Registration

Overview on LUT Registration

LUT Registration is essential for exporters who wish to supply goods or services without paying Integrated GST (IGST). Under GST law, a Letter of Undertaking (LUT) allows exporters to make exports without upfront tax payment, provided certain conditions are met. It reduces cash flow blockage and simplifies export compliance. LUT must be filed online on the GST portal annually before the start of the financial year. Failure to file an LUT may require payment of IGST and claiming a refund later, which can delay business transactions. Exporters can apply for LUT if they have no record of tax evasion or prosecution. Timely LUT registration ensures smooth trade operations and compliance with GST rules. It is a mandatory compliance requirement for exporters seeking zero-rated tax benefits under GST.
 

Eligibility Criteria for LUT Registration

Exporters seeking to supply goods or services without upfront IGST payment must file a Letter of Undertaking (LUT) under GST. This facility enables eligible businesses to make zero-rated supplies, improving cash flow and simplifying export compliance. However, the GST law lays down certain conditions to ensure only compliant exporters can avail of this benefit.

To file LUT, exporters must meet specific conditions under GST:

• Must be registered under GST.
   
• Should not have been prosecuted for tax evasion exceeding ₹250 lakh in the previous five years.
   
• Can be engaged in export of goods, export of services, or supply to SEZ units without payment of IGST.
   
• The LUT is valid only for one financial year and must be renewed annually.
   
• Any exporter, including status holders and merchant exporters, can apply.
   
• Failure to meet eligibility requires furnishing an export bond with a bank guarantee instead of LUT.

By meeting these criteria and filing the LUT on time, exporters can reduce tax burdens, avoid working capital blockage, and operate more competitively in global markets.

Exploring the LUT Bond

The LUT bond is a formal commitment to the government, declaring that the exporter will comply with GST laws while making zero-rated supplies. It replaces the need to pay IGST upfront for exports.

• If an exporter fails to meet conditions, they must instead provide an export bond backed by a bank guarantee.
   
• The bond serves as security, ensuring tax dues can be recovered if the exporter defaults.
   
• This mechanism safeguards revenue while allowing genuine exporters smoother operations.
   
• The LUT bond is cost-effective, unlike bonds that may tie up working capital.​​​​​​​

Exporters must file this bond annually on the GST portal for continued benefit.

Process of LUT Registration

Step 1 - Login to GST Portal
Access the GST portal using GSTIN and credentials to begin the LUT application process.

Step 2 - Select LUT Filing Option
Navigate to Services → User Services → Furnish LUT to open the online form.

Step 3 - Fill Required Details
Enter fiscal year, export type, and other details as required in the online form.

Step 4 - Upload Supporting Documents
Attach identity proof, previous LUT (if any), and compliance records for verification.

Step 5 - Submit Undertaking
Agree to GST rules and submit the form digitally with an authorized signatory’s DSC or EVC.

Step 6 - Approval and Acknowledgment
Receive immediate acknowledgment on approval, enabling IGST-free exports for that year.

Advantages of Filing LUT for Exporters

•  No IGST Payment on Exports
  Avoids upfront IGST payment, improving cash flow for exporters.
   
• Faster Export Processing
  Eliminates delays caused by tax payment and refund processes.
   
• Annual Validity
  One LUT filing covers the entire financial year, reducing paperwork.
   
• Cost Savings
  Prevents working capital from being tied up in taxes until refund.
   
• Compliance Recognition
  Demonstrates trustworthiness and compliance with GST rules.
   
• Ease of Doing Business
  Simplifies export procedures, making operations smoother and more efficient.