GST LUT Filing & Export Refund

Integrated Goods and Services Tax Act, 2017: Section 16(1)(a) classifies export of goods or services as a "zero-rated supply." Section 16(3) gives the exporter two routes to give effect to this zero-rating: (a) export under a Letter of Undertaking (LUT) or bond without payment of integrated tax and claim refund of unutilised input tax credit, or (b) export on payment of integrated tax and claim refund of the tax paid. Rule 96A of the CGST Rules, 2017 prescribes the procedure and conditions for furnishing the LUT/bond, including the requirement to realise export proceeds within the period allowed under FEMA and to pay tax with interest if this condition is not met.

Central Goods and Services Tax Act, 2017: Section 54 governs refund claims generally, and Section 54(6) specifically entitles an exporter to a 90% provisional refund of the claimed amount within 7 days of acknowledgment of the refund application, pending final verification. Rules 89 and 96 of the CGST Rules prescribe the application procedure for refund of unutilised ITC (Rule 89) and refund of IGST paid on exports (Rule 96), respectively. LUT filing and refund claims should be tracked against these provisions to avoid working-capital lock-up beyond the statutory turnaround.

GST LUT and export refund is the machinery that keeps exporting businesses' cash flow intact under GST. Zero-rated supplies — exports — can be made without paying IGST by filing a Letter of Undertaking under Rule 96A of the CGST Rules 2017, in which case the exporter's input tax credit accumulates and is refunded under Section 54 of the CGST Act read with the refund rules. Alternatively, the exporter can pay IGST on the export and claim the automatic refund. Either way, the exporter is entitled to the tax paid on inputs — the question is the documentation.

The LUT is the operational key for exporters: filed at the start of the year, it lets the exporter ship without blocking working capital in IGST. The refund claim — the accumulated input tax credit on the zero-rated supplies — is where the cash actually returns. The claim requires the returns, the invoices, the shipping bills and the LUT to all be in order, and the department's scrutiny of refund claims is detailed: a mismatch in the shipping bill details, a return not filed, or an invoice missing from the reconciliation sends the claim back.

Skipping the LUT or filing the refund late costs real cash flow. Without the LUT, the exporter pays IGST on every export and waits for the refund; a refund claim filed without the complete documentation waits months; and an exporter who never claims the credit simply loses the input tax into the government's hands.

This service is for exporters managing their GST export position. We file the LUT under Rule 96A of the CGST Rules 2017, reconcile the zero-rated supplies, prepare and file the refund claims under Section 54 of the CGST Act, respond to the department's queries and scrutiny, and keep the export position running so the input tax credit comes back on schedule.