Bangalore is often called the “Silicon Valley of India,” and for good reason. Thousands of you are providing world-class software, design, and consulting services to clients in the US, Europe, and beyond.
But there’s a common hurdle: GST on Exports. By law, exports are “Zero-Rated,” meaning they should be tax-free. However, the standard process is to pay 18% Integrated GST (IGST) upfront and then wait months for the government to refund it. For a company with a ₹10 Lakh invoice, that’s ₹1.8 Lakhs of your working capital stuck in a government vault every single time you bill a client.
At Bharatiya Tax Pro, we help our export clients bypass this “waiting game” entirely using the Letter of Undertaking (LUT).
What is a GST LUT?
A Letter of Undertaking (LUT) is a simple online declaration filed via Form GST RFD-11. By filing this, you “undertake” to the government that you will complete the export and bring the foreign currency into India within the prescribed time. In exchange, the government allows you to export your services without paying a single rupee of IGST.
Why Every Exporter Needs an LUT in 2026
- Zero Working Capital Blockage: You keep your 18% tax amount in your bank account. Use it for salaries, server costs, or marketing instead of waiting for a refund.
- No Refund Hassles: You don’t have to hire someone to track refund statuses or reply to “deficiency memos” from the refund department.
- Competitive Pricing: Since you aren’t paying tax upfront, you can offer more competitive rates to your global clients.
- One-Year Validity: You only need to file it once per financial year. It covers all your exports from April 1st to March 31st.
Are You Eligible?
The eligibility for LUT is comprehensive. You can file an LUT if:
- You are a registered GST taxpayer.
- You have not been prosecuted for tax evasion exceeding ₹2.5 Crores.
- You intend to export services (or goods) and will receive the payment in a convertible foreign currency (e.g., USD, EUR, GBP) within 1 year.
The Step-by-Step Filing Process (Form RFD-11)
Filing an LUT takes less than 10 minutes if you have your details ready:
- Login: Go to the official GST Portal.
- Navigate: Go to Services > User Services > Furnish Letter of Undertaking (LUT).
- Select Year: Choose the current financial year (e.g., 2025-26 or 2026-27).
- Checkboxes: Tick the three mandatory declarations (committing to export and to follow the rules).
- Witnesses: You need the names, addresses, and occupations of two independent witnesses.
- Submit: Sign using your DSC (for companies) or EVC (for proprietors).
Important: The “Payment Realization” Rule
The LUT is a promise. To keep that promise, you must ensure that payment for your service export is received in India within 1 year of the invoice date. If you fail to bring in the foreign currency, you will have to pay the 18% IGST, along with 18% interest from the date of the original invoice.
Why Partner with Bharatiya Tax Pro?
While filing an LUT is simple, managing the FIRA (Foreign Inward Remittance Advice) and ensuring your GSTR-1 correctly reflects “Export under LUT” is where many businesses fail.
At Bharatiya Tax Pro, we provide end-to-end support for service exporters. With 40 years of experience, we ensure:
- Your LUT is renewed every year before March 31st.
- Your invoices have the mandatory “Export under LUT” legal disclaimer.
- We reconcile your foreign bank credits with your GST filings to keep you audit-ready.
Are you tired of your money being stuck in GST refunds? Consult with Bharatiya Tax Pro Today. We’ll file your LUT and help you streamline your global billing.
➡️ Book your appointment by visiting our website: https://bharatiyataxpro.com/
➡️ WhatsApp: https://wa.me/+918884048888