Exporters and suppliers to Special Economic Zones (SEZs) must renew their Letter of Undertaking (LUT) annually to continue making zero-rated supplies without paying IGST. The current LUT for FY 2024-25 will expire on March 31, 2025. The GSTN has activated the LUT filing functionality for FY 2025-26 on the GST Portal, ensuring businesses can seamlessly continue their export operations without financial strain or administrative delays.
Filing the LUT on time eliminates the hassle of paying IGST upfront and later applying for refunds, improving cash flow and operational efficiency. This guide provides a step-by-step approach to ensure a smooth filing process and avoid compliance pitfalls.
Understanding the LUT
A Letter of Undertaking (LUT) is a declaration filed by exporters under GST, allowing them to export goods or services without paying IGST, provided that:
The revenue is remitted in convertible foreign exchange within three months.
The exporter adheres to all GST compliance requirements.
Without LUT | With LUT |
|---|---|
| Pay IGST upfront and claim a refund later | Export without paying IGST upfront |
| Lengthy refund process affecting liquidity | Seamless transactions and improved cash flow |
| Requirement to furnish an export bond | Eliminates the need for an export bond |
| Increased working capital burden | Cost-efficient and hassle-free operations |
Who is Eligible to File an LUT?
| Eligible Entities | Non-Eligible Entities |
| Exporters of goods or services | Businesses prosecuted for tax evasion exceeding Rs. 2.5 crore |
| Suppliers to SEZs | Non-GST registered entities |
| Entities engaged in zero-rated supplies |
LUT Filing Criteria
Must be a GST-registered entity.
Engaged in zero-rated supplies (exports or SEZ supplies).
No history of tax evasion exceeding Rs. 2.5 crore.
No pending refund claims.
Deadline for LUT Filing
LUT must be filed before initiating exports or SEZ supplies for a new financial year.
It remains valid for one financial year (April 1 - March 31). The LUT for FY 2025-26 should be filed by March 31, 2025 to avoid disruptions in business operations.
Consequences of Late Filing: ❌ Delay in exports and SEZ supplies. ❌ Obligation to pay IGST and claim refunds later. ❌ Risk of non-compliance penalties.
Step-by-Step Process to File LUT on GST Portal
| Step | Action |
| Step 1 | Log in to the GST Portal using GSTIN and password. |
| Step 2 | Navigate to Services > User Services > Furnish Letter of Undertaking. |
| Step 3 | Select the financial year 2025-26 and upload any previous LUT (if applicable). |
| Step 4 | Enter required details, including witness information and self-declaration. |
| Step 5 | Preview, verify, and save the application. |
| Step 6 | Sign using Digital Signature Certificate (DSC) (for Companies & LLPs) or Electronic Verification Code (EVC) (for Proprietorships & others). |
| Step 7 | Submit and receive an Application Reference Number (ARN). |
Essential Documents and Information for LUT Filing
| Requirement | Details |
| Financial Year | Select 2025-26 |
| Witness Details | Name, address, and occupation of two witnesses |
| Self-Declaration | Compliance with GST regulations |
| ARN | Must be referenced on all export and SEZ invoices |
Key Benefits of Timely LUT Filing
✅ Avoid IGST payments and cumbersome refund claims. ✅ Improve cash flow and working capital efficiency. ✅ Reduce documentation burden with seamless online filing. ✅ Ensure uninterrupted export and SEZ supplies operations.
Caution Points to Avoid Defaults
⚠️ Late Filing: Delays in LUT renewal can lead to IGST payment obligations and disrupt business operations. ⚠️ Incorrect Witness Details: Ensure correct name, address, and occupation of witnesses to prevent rejection. ⚠️ Non-Adherence to Timelines: Exporters must ensure receipt of foreign exchange within three months to stay compliant. ⚠️ Inaccurate Documentation: Ensure proper records of LUT and ARN are maintained for audit and compliance purposes.
Timely LUT filing ensures compliance, enhances cash flow efficiency, and streamlines export transactions. Stay ahead by renewing your LUT before the deadline to avoid any operational disruptions.
