Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What an LUT does
It lets you export at zero-rate without blocking working capital in IGST that you’d otherwise pay and reclaim.
File yearly before exporting
Submit Form RFD-11 on the portal at the start of each financial year, before your first export of the year.
Filing it, and what happens if you don't
A LUT lets a registered exporter make zero-rated supplies — exports and supplies to SEZ units — without paying IGST upfront, so working capital isn’t locked in tax that you’d otherwise pay and reclaim. You file it once per financial year in Form RFD-11 on the portal, before the first export of the year, declaring that you’ll fulfil the export conditions; approval is generally immediate and online, with no documents needed in routine cases. Most exporters qualify; the facility can be withdrawn only if you’ve been prosecuted for a significant tax evasion, in which case you’d export on payment of tax instead. If you don’t file a LUT, you can still export, but you must pay IGST on each export and then claim it back as a refund — which works, but ties up cash until the refund comes. The practical points are to file the LUT at the very start of each financial year (a lapse means falling back to the pay-and-refund route for supplies made before it’s filed), to quote the LUT reference on export invoices, and to keep the export and payment-realisation evidence that supports the zero-rating. For a regular exporter, the annual LUT is the simpler, more cash-friendly route.