GST, LUT and refunds for exporters

Under GST, an export of goods or services is a zero-rated supply, and so is a supply to a unit or developer in a special economic zone for its authorised operations. Zero-rated means the export leaves India free of GST, while you still take input tax credit on the goods and services you used to make it.

Section 16 of the IGST Act sets out how. Either you export under a letter of undertaking without paying IGST and claim back your unused credit, or you pay IGST and claim that back. Both end with no tax on the export. They differ in cash flow and paperwork.

1. 1Before your first export in a financial year, file an LUT in Form GST RFD-11 on the GST portal. You choose the financial year it covers, and it expires at the end of that year, so file a new one every year.
2. 2Your export invoices then carry no IGST.
3. 3The input tax credit you built up stays unused. Claim it as a refund on the GST portal in Form RFD-01, under exports without payment of tax, with a statement of your export invoices and shipping bills.
4. 4File the claim within two years of the relevant date. For goods sent by sea or air, that is the day the ship or aircraft leaves India.

Any GST-registered exporter can file an LUT, except one that has been prosecuted for tax evasion above a high threshold, which must give a bond instead.

1. 1You charge IGST on the export invoice and pay it, from your input tax credit or in cash.
2. 2For goods, your shipping bill is itself the refund claim. It counts as filed once the export manifest of the ship, aircraft or vehicle is filed, you have filed a valid GSTR-3B return, and you have completed Aadhaar authentication.
3. 3The export details in your GSTR-1 return must match the shipping bill. A mismatch holds the refund until you correct it.
4. 4The customs system processes the refund and pays it into the bank account in your registration, as given to customs.

For services, the refund of IGST paid is claimed on the GST portal in Form RFD-01. Since 1 October 2023 this route is open only to the goods, services and exporters the government notifies. When we checked, that covered all goods and services except a short list of goods, so make sure your product is not on it.

• An LUT keeps your cash free: you never pay IGST on the export, and the only refund is your unused credit.
• Some exporters prefer to pay IGST because, for goods, the shipping bill is the claim and needs no separate application. Ask your CA which route is faster for your business.
• You cannot have both. Unused input tax credit is not refunded on supplies for which you claim back the IGST paid.
• If your goods carry export duty, neither refund is allowed.

• Getting paid matters for GST too. If you got a refund under an LUT and the export money does not arrive within the time RBI allows, you must pay the refund back with interest within 30 days after that time. Our payment deadline tool shows your RBI date.
• Report every export invoice correctly in GSTR-1. On either route, the GST portal and customs match it against your shipping bill.
• GST rates changed on 22 September 2025. If you pay IGST, check your product's current rate by its HS code, not from an old invoice.