Exporters of goods and services under GST have the option to export without payment of Integrated GST (IGST) by furnishing a Letter of Undertaking (LUT). Filing an LUT is one of the most important annual GST compliances for exporters, as it helps avoid the blockage of working capital and simplifies the export process.

Since an LUT is valid only for one financial year, exporters must renew it every year to continue making zero-rated supplies without payment of IGST.

This article explains the LUT filing process for FY 2026-27, eligibility criteria, validity period, and a practical compliance checklist for exporters.

What is LUT Under GST?

A Letter of Undertaking (LUT) is a declaration furnished by an exporter to the GST department stating that exports will be made without payment of IGST while complying with the prescribed GST provisions.

By filing LUT, exporters can:

• Export goods without payment of IGST.
• Export services without payment of IGST.
• Avoid blockage of working capital.
• Claim refund of unutilized Input Tax Credit (ITC), where eligible.

Legal Provision

Exports are treated as:

Zero-Rated Supplies

under the GST law.

Exporters can choose either of the following options:

Option 1

Export under LUT without payment of IGST.

Option 2

Export on payment of IGST and subsequently claim a refund.

Most exporters prefer filing LUT due to better cash flow management.

Who Can File LUT?

The following persons can generally furnish LUT:

• Exporters of goods
• Exporters of services
• SEZ suppliers
• Businesses making zero-rated supplies

Provided they satisfy the conditions prescribed under GST law.

Validity of LUT

An LUT is valid for:

One Financial Year

Therefore, an LUT filed for FY 2026-27 will generally remain valid up to:

31 March 2027

A fresh LUT must be filed for each subsequent financial year.

Due Date for LUT Filing FY 2026-27

There is no specific statutory due date prescribed.

However, exporters should ideally file the LUT:

Before Making the First Export Supply in FY 2026-27

to avoid compliance issues and ensure uninterrupted exports without payment of IGST.

Documents Generally Required for LUT Filing

The GST portal typically requires:

• GSTIN
• Legal name of business
• Address details
• Authorized signatory details
• Witness details, where applicable

No physical submission is generally required when filing online.

Process of Filing LUT on GST Portal

Step 1: Login to GST Portal

Access the GST portal using valid credentials.

Step 2: Navigate to LUT Filing Section

Go to:

Services → User Services → Furnish Letter of Undertaking (LUT)

Step 3: Select Financial Year

Choose:

FY 2026-27

Step 4: Furnish Required Declarations

Confirm compliance with the prescribed GST conditions.

Step 5: Submit Application

Submit using:

• DSC (Digital Signature Certificate), or
• EVC (Electronic Verification Code)

Step 6: Download Acknowledgement

Download and preserve the ARN and acknowledgement for future reference.

Benefits of Filing LUT

Improved Cash Flow

No need to pay IGST upfront on exports.

Reduced Working Capital Blockage

Funds remain available for business operations.

Simplified Refund Process

Exporters may claim refund of accumulated ITC where applicable.

Faster Compliance

Avoids the need to seek IGST refunds on every export transaction.

Annual Compliance Checklist for Exporters

1. File LUT Before Commencing Exports

Ensure LUT for FY 2026-27 is filed before the first export transaction.

2. Verify GST Registration Status

GST registration should remain active and compliant.

3. Maintain Export Documentation

Preserve:

• Tax invoices
• Shipping bills
• Bill of export
• Foreign Inward Remittance Certificates (FIRC)
• Bank Realization Certificates (BRC), where applicable

4. Report Exports Correctly in GST Returns

Ensure exports are accurately disclosed in:

• GSTR-1
• GSTR-3B

5. Reconcile Export Turnover

Match:

• Books of accounts
• GST returns
• Shipping documents
• Foreign remittance records

6. Monitor Realization of Export Proceeds

Export proceeds should be realized within the period prescribed under FEMA regulations.

7. Track Input Tax Credit

Regularly reconcile:

• Purchase records
• GSTR-2B
• ITC claimed

8. File GST Refund Applications Timely

Where claiming refund of accumulated ITC:

• Verify eligibility
• Maintain supporting documents
• File within prescribed timelines

9. Preserve LUT Acknowledgement

Maintain LUT filing records for assessments and audits.

10. Conduct Periodic GST Reviews

Regular reviews help identify:

• Return mismatches
• ITC issues
• Export reporting errors

before they result in notices.

Common Mistakes Made by Exporters

Failure to Renew LUT

Using an expired LUT can create GST liabilities.

Incorrect Export Reporting

Mismatch between returns and shipping documents often leads to scrutiny.

Delayed Refund Applications

Late filing can result in loss of refund opportunities.

Improper Documentation

Incomplete records may lead to rejection of refund claims.

Non-Reconciliation of Export Data

Differences between books and GST returns may trigger notices.

Consequences of Not Filing LUT

If LUT is not furnished:

• Export may require payment of IGST.
• Refund procedures become more cumbersome.
• Working capital may get blocked.
• Additional compliance burden may arise.

Best Practices for Exporters

✔ File LUT at the beginning of every financial year.

✔ Maintain complete export documentation.

✔ Reconcile GST returns monthly.

✔ Monitor export proceeds realization.

✔ Conduct regular ITC reviews.

✔ Preserve all GST acknowledgements and refund records.

Conclusion

Filing an LUT is one of the most important annual GST compliances for exporters. For FY 2026-27, exporters should ensure that a fresh LUT is filed before making export supplies so that exports can continue without payment of IGST. Timely filing, proper documentation, accurate GST reporting, and regular reconciliations help businesses remain compliant while maximizing cash flow and minimizing litigation risks.