When must an exporter file an LUT instead of paying IGST on exports?
Any registered person exporting goods or services without payment of integrated tax must furnish a Letter of Undertaking in Form RFD-11 under Rule 96A of the CGST Rules 2017, read with Section 16(3)(a) of the IGST Act 2017. Without a valid LUT for the financial year, the exporter must pay IGST upfront and then claim a cash refund — the LUT route eliminates that outflow entirely.
What is the time limit to file a GST refund claim for exports, and which form is used?
A refund application under Section 54(1) of the CGST Act 2017 must be filed within two years from the relevant date. For export of goods under the LUT route, the relevant date is the date the shipping bill is filed with customs. The application is filed in Form RFD-01 on the GST portal, supported by GSTR-1 shipping bill data and GSTR-3B ITC details.
What is the relevant date for a services export refund when foreign remittance is delayed?
For export of services, the relevant date under Section 54(14) of the CGST Act 2017 read with Explanation (2)(b) is the earlier of: (i) date of receipt of payment in convertible foreign exchange (or INR where RBI permits), or (ii) date of issue of the invoice. If remittance arrives months after invoicing, the invoice date governs the two-year limitation — so filing cannot be deferred until receipt of payment.
Can merchant exporters and SEZ units use the LUT route?
SEZ developers and SEZ units are covered by Section 16(1)(b) of the IGST Act 2017 (zero-rated supply) and may furnish an LUT under Rule 96A. Merchant exporters purchasing goods for export can avail the concessional 0.1% GST rate under Notification No. 40/2017-CT(Rate) and 41/2017-IGST(Rate), but the supplier must hold a valid export order and the merchant must hold a valid LUT and GSTIN; the shipping bill must be linked in GSTR-1 to close the export chain.
What happens if export proceeds are not realised within the RBI-prescribed period after filing under LUT?
Rule 96A(1) of the CGST Rules 2017 requires export proceeds to be realised within the period prescribed under FEMA 1999 — generally 9 months for goods exports as per RBI Master Direction on Export of Goods and Services (extendable by the AD bank). If proceeds are not realised in time, the LUT is treated as void for that supply and the exporter must pay the IGST that would have been due, along with interest at 18% per annum under Section 50 of the CGST Act 2017 from the date of export.
