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GST LUT letter of undertaking filing

GST LUT (Letter of Undertaking) Filing

Maximize Your Export Cash Flow with FOXTAX Precision

Are you looking to export goods or services without the burden of paying Integrated GST (IGST) upfront? At FOXTAX, we specialize in securing your Letter of Undertaking (LUT), allowing you to enjoy “Zero-Rated Supplies” and keep your working capital where it belongs—inside your business.

File your GST LUT Filing seamlessly with FOXTAX. starting at INR 999/- only.

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    GST LUT (letter of undertaking) filing Services in India

    What is a GST LUT?

    The Letter of Undertaking (LUT) is a strategic filing that enables exporters to ship goods or services outside India (or to SEZ units) without paying any IGST. Instead of the “Pay Tax and Claim Refund” cycle, an LUT allows you to export under a bond, effectively reducing your tax outgo to zero at the point of sale.

    The FOXTAX Advantage: We ensure your LUT is filed correctly at the start of every financial year, protecting your eligibility for tax-free exports.

    Who Should File for an LUT?

    Under the GST regime, the following entities are eligible and should prioritize LUT filing via FOXTAX:

    • Exporters of Goods: Businesses shipping physical products globally.
    • Service Providers: Freelancers, IT firms, and consultants serving international clients.
    • SEZ Suppliers: Units supplying goods or services to Special Economic Zones.
    • Zero-Rated Suppliers: Any business intending to export without paying IGST (provided they have not been prosecuted for tax evasion exceeding ₹2.5 Crores).

    Why LUT Filing is a Must for Your Business

    1. Uninterrupted Cash Flow: Avoid locking up your capital in tax payments while waiting months for government refunds.
    2. Reduced Compliance Burden: Eliminate the need to file complex refund applications for every export invoice.
    3. Competitive Pricing: By removing the tax component from your invoice, your products/services become more price-competitive in the international market.
    4. Annual Validity: One filing covers you for the entire financial year (April to March).

    GST LUT Undertaking Price

    Starter

    Package starting from

    ₹ 999/-
    (All Inclusive)

    • Filing of One Letter of Undertaking (LUT) with GST authorities

    Benefits of GST LUT Filing

    Preservation of Working Capital

    The most significant advantage is the elimination of upfront Integrated GST (IGST) payments on export invoices. Without an LUT, your capital remains "locked" in the tax system until a refund is processed—a cycle that can take months and restrict your ability to reinvest in operations or scaling.

    Elimination of Refund Hassles

    Filing an LUT allows you to bypass the entire "pay-and-claim" refund mechanism. This removes the administrative burden of tracking multiple refund applications, dealing with departmental queries, and managing the extensive paperwork typically required for IGST refunds.

    Exemption from Bank Guarantees

    For many businesses, the alternative to an LUT is an export bond. Bonds usually require a bank guarantee of up to 15% of the bond value, which often necessitates collateral or blocking a credit line. An LUT is a self-declaration that requires no collateral or security, saving significant financial costs.

    Global Competitive Edge

    By avoiding the immediate tax cost, Indian exporters can offer more competitive pricing in the international market. Since you are not factoring in the cost of blocked capital or interest on tax payments, your net margins remain healthier, allowing for more aggressive global expansion.

    Seamless Logistics and Faster Fulfillment

    With no tax-related bottlenecks at the point of dispatch, your export consignments move through customs and logistics faster. This leads to improved delivery timelines, higher customer satisfaction, and a more streamlined supply chain.

    Enhanced Institutional Credibility

    A valid LUT serves as a "Trusted Traveler" pass for your exports. It signals to banks, customs, and international clients that you are a recognized, compliant entity that adheres to all statutory export obligations under Section 16 of the IGST Act.

    Step-by-Step Process of GST LUT Filing

    FOXTAX follows a systematic GST LUT filing process:

    Strategic Review

    Our tax experts verify your eligibility and ensure your GST filings are up to date to prevent department queries.

    Digital Submission

    We draft and file the GST RFD-11 form on the GST Portal with precision, ensuring all legal declarations are accurate.

    Acknowledgment Delivery

    Within 24–48 hours, we provide you with the Application Reference Number (ARN), confirming your status as a zero-rated exporter.

    Frequently Asked Questions (FAQs)

    Who exactly is eligible to file an LUT, and are there any exclusions?
    Almost all GST-registered exporters of goods and services, including those supplying to SEZ units, are eligible. The only major exclusion applies to individuals or entities prosecuted for tax evasion exceeding ₹2.5 Crores under the CGST/IGST Act or existing laws. For these cases, a bond with a bank guarantee is required instead of an LUT.
    Is the LUT a one-time registration, or does it expire?
    An LUT is valid for one financial year only (April 1st to March 31st). To continue exporting without paying IGST, you must file a fresh LUT at the start of every new financial year. FOXTAX automates this by notifying you in early March, ensuring your shipments aren't delayed by an expired certificate.
    What happens if I forget to file my LUT before shipping goods/services?
    If you export without a valid LUT, the transaction is treated as a "taxable supply," and you are legally required to pay the applicable IGST. While you can later claim a refund, it blocks your working capital. In some cases, authorities may treat the delay as a "procedural lapse" if you can prove the export was completed, but it often leads to unnecessary legal friction.
    Can service exporters and freelancers also benefit from LUT filing?
    Absolutely. Many freelancers and IT service providers serving international clients use the LUT to avoid the 18% IGST hit on their invoices. This allows you to receive the full contract value in foreign exchange without tax deductions, keeping your pricing competitive in the global market.
    Are there any conditions I must fulfill after filing the LUT?
    Yes. Filing is just the first step. To maintain your "Zero-Rated" status, you must:

    For Goods: Ensure the goods leave India within 3 months of the invoice date.

    For Services: Realize the payment in convertible foreign exchange within 1 year of the invoice date. Failure to meet these timelines makes the GST (plus 18% interest) immediately payable.
    Why should I use FOXTAX instead of filing the LUT myself on the portal?
    While the portal is open to all, incorrect filing or choosing the wrong witnesses can lead to "Deficiency Memos" from the tax department, which can halt your exports. FOXTAX provides a guaranteed 24-hour turnaround, meticulously reviews your declarations, and stores your ARN (Application Reference Number) in your client dashboard for instant retrieval during audits. We don’t just file; we protect your cash flow.
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