Question 1

What is a Letter of Undertaking (LUT)?

Accepted Answer

An LUT is a declaration filed on the GST portal (form GST RFD-11) that lets registered exporters ship services or goods without paying IGST upfront. It is valid for one financial year and costs nothing to file. Without an LUT, exporters must pay IGST and claim a refund later, or execute a bond.

Question 2

Why is GST 0% on this invoice?

Accepted Answer

Export of services is a zero-rated supply under the IGST Act. When you bill under an LUT, no integrated tax is charged, and the invoice must carry the declaration that the supply is made under a Bond or Letter of Undertaking without payment of integrated tax.

Question 3

What makes a service qualify as an export?

Accepted Answer

The supplier must be in India, the recipient outside India, the place of supply outside India, payment must arrive in convertible foreign exchange, and the supplier and recipient must not be establishments of the same person.

Question 4

Do I still need to file GST returns for zero-rated invoices?

Accepted Answer

Yes. Zero-rated exports are reported in GSTR-1 (table 6A for LUT supplies) and GSTR-3B, with the LUT reference. Reporting keeps your GSTIN compliant and is required if you ever claim input tax credit refunds.

LUT export invoice generator

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