A Letter of Undertaking (LUT) is a document filed by GST-registered exporters to claim exemption from paying Integrated Goods and Services Tax (IGST) on exports. By filing LUT, businesses can export goods or services without paying IGST and avoid the hassle of claiming tax refunds later. It’s mandatory for exporters who wish to make zero-rated supplies without payment of tax under bond or LUT.
LUT filing is valid for one financial year and must be renewed annually. Businesses involved in international trade, including service exports, must ensure timely filing to maintain seamless operations, reduce working capital blockage, and remain compliant with GST laws.