How to File and Renew Your LUT for FY 2025-26?

International trade can be made easy through proper export procedures and documentation. The text of the whole process entails legal, financial, and logistical requirements that the exporters must fulfil in compliance with national and international regulations. Regarding international trade risks, proper documentation facilitates smooth customs clearance and prompt payment. The main export documents are Commercial Invoices, Bills of Lading or Airway Bills, Export Declarations, Certificates of Origin, Packing Lists and Letters of Undertaking LUT for zero-rated exports. Depending on the product’s nature and country of destination, other documentary approvals, such as an export license or permit, might also be required. Exporters have to comply with the quality standards, labelling regulations, and trade agreements that would make their transactions smooth. Ideally, the efficient management of export documentation would save a lot of time and off-penalty and give a company worldwide recognition. A good exporter needs to know these procedures well before making their operation streamlined towards global markets.

What is LUT under GST?

A Letter of Undertaking (LUT) is a required certificate under India’s Goods and Services Tax (GST) system for exporters to ship goods or services without charging Integrated GST (IGST). The certificate is essentially a signed commitment by the exporter to comply with all the required GST provisions, along with a promise of dispatching shipments within the required timeframe. The LUT has to be furnished to the relevant GST office or filed online through the GST portal. With a LUT, exporters are not required to bear the immediate cash burden of tax payments and later claim refunds. The document is especially beneficial for companies that undertake frequent export transactions since it simplifies compliance procedures and enhances cash flow. The LUT is valid for one financial year and has to be renewed every year. In the absence of LUT, the exporters have to pay IGST, which will later be claimed, thus multiplying both administrative and financial difficulties.

A Letter of Undertaking (LUT) provides that the exporter may export goods or services without any advance payment of Integrated Goods and Services Tax (IGST) in respect of such exports and also claim refunds subsequently. Therefore, it gives very much flexibility for exporters to export goods without paying such taxes in advance and claiming them through the assessment process as appropriate just by submitting a LUT. This facilitates duty-free exports and improved cash flows through less compliance requirements.

Which Entities are Eligible to Apply for LUTs?

The below-mentioned types of exporters are allowed to file a LUT under the Goods and Services Tax (GST) regime:

1. Registered Taxpayers Involved in Exports – Any person or entity registered under GST who is engaged in exports of goods or services can apply for an LUT. The LUT should be furnished before the export of goods or services.
2. Companies Exporting Under Zero Rated Supply – Organisations exporting goods or services under zero rated supply without paying IGST can benefit from this option. This includes direct exports and supplies to Special Economic Zones (SEZs).
3. Suppliers to SEZ Units/Developers – Local suppliers supplying goods or services to SEZ units or developers without the payment of IGST are entitled to file a LUT.
4. Deemed Exports (In Certain Cases) – Deemed exports are those transactions in which goods do not physically leave India but are treated as exports under GST law. Some types of deemed exports can be eligible to file a LUT.

Who is Not Eligible to File for LUT?

1. Businesses that primarily provide goods or services meant for local consumption and are not involved in exports or supply to Special Economic Zones (SEZs) are not eligible to apply for a LUT.
2. Exporters who have been charged with tax evasion which means those individuals or entrepreneurs who have been prosecuted for tax evasion of ₹250 lakh or more are not eligible to file a LUT. These businesses must submit a bond instead.

Validation and Renewal of LUT

1. LUTs are valid for a term of one financial year (April to March). They must be renewed annually to remain eligible.
2. If the exporter doesn’t comply with the terms of the LUT (e.g., is unable to complete the export within the stated time period), authorities can require all subsequent exports be made only with IGST payment and refund claims rather than under the LUT.

Documentation and Procedure to File and Renew LUT

To get a Letter of Undertaking (LUT) as per the Goods and Services Tax (GST) regime, exporters have to furnish certain documents affirming their eligibility and compliance standards. The LUT application can be filed online via the GST portal or, if required, offline by visiting the concerned GST office.

Documents Required for LUT Application

1. GST Registration Certificate – This is evidence that the exporter is registered and qualified for the LUT.
2. Business/Proprietor PAN Card – A copy of the business entity’s or proprietor’s (in the case of a sole proprietorship) PAN card should be submitted.
3. GST RFD-11 (LUT Application Form) – This official form has to be filled and digitally signed to file the LUT application.
4. Aadhaar and PAN Cards of the Authorised Signatory – The Aadhaar and PAN cards of the owner, partner, or director have to be attached while signing the LUT.
5. Export Documents (Previous Invoices, if available) – Proof of past export business, for example, invoices, shipping bills, or bills of lading, should be submitted to support the applicant’s export background. Although this might not be required for new applicants, it will make the application stronger.
6. Exporter’s Banking Details – It can be verified by a cancelled cheque or a bank statement.
7. Declaration on Business Letterhead – There must be a self-declaration that establishes LUT conditions and GST rule compliance.
8. Authorisation Letter (wherever necessary) – In case of submission of the LUT by an authorised representative like chartered accountant or company secretary, there has to be an authorisation letter.

Online Procedure for Filing LUT

To retain the facility to export goods or services without paying IGST, filing and renewal of the Letter of Undertaking (LUT) has to be done once a fiscal year (Apr-Mar). The process of renewal of the fiscal year 2025-26 can be done online through the GST portal prior to the beginning of the new financial year.

1. Visit the GST Portal. Go to www.gst.gov.in. Log in with your GSTIN, username, and password.
2. Find the LUT Filing Section. Go to Services → User Services → Furnish Letter of Undertaking.
3. Choose a Financial Year. Select 2025-26 from the drop-down menu. If it is your first filing, choose the corresponding year.
4. Fill Form GST RFD-11. The LUT form GST RFD-11 will be shown. Verify the pre-filled information is correct.
5. Upload Documents as Required. Provide supporting documents such as the GST registration, PAN card of the business, Aadhaar and PAN of the signatory as authorised. For renewals, add acknowledgement of the past LUT. Offer self-declaration on the letterhead of the business confirming adherence to LUT standards.
6. Declaration and Undertaking. Mark the declaration box confirming that the exporter undertakes to comply with all GST rules and export conditions.
7. Digital Signature and Submission. Seal the form electronically with a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). Click on the Submit button.
8. Download the Acknowledgment. An Acknowledgment Reference Number (ARN) will be generated once submitted. Download and store the LUT acknowledgement for record purposes.

Important Things to Note about LUT Submission and Renewal

1. In order to guarantee tax-free exports from April 1, 2025, the LUT must be renewed by March 31, 2025.
2. The LUT holds good for a period of one financial year, i.e., from April 1, 2025, to March 31, 2026.
3. Approval Process: In general, instant after online filing, subject to the requirement for additional verification.
4. Consequences of Non-Compliance: Not filing an LUT requires exporters to pay IGST and claim a refund.

By following this process, companies can easily renew their LUT for FY 2025-26, thus maintaining zero-rated exports without the burden of taxes.

Benefits of Using LUT

Using a LUT allows exporters to increase operating efficiency, decrease expenses, and focus on international growth. Exporters who employ a LUT benefit from competitive leverage by promoting easier transactions and obtaining higher fiscal efficiency in foreign trade.

1. Relieves cash pressure by allowing exporters to avoid payment of Integrated GST (IGST) on goods and services.
2. Improves Cash Flow by eliminating the need to pay taxes in advance and wait for refunds, resulting in more liquidity.
3. Facilitates Regulatory Compliance as it reduces documentation and eliminates the complexity involved in filing IGST refund applications.
4. Streamlines the Export Process by allowing faster customs clearance of goods without any tax related delays.
5. Cost Effectiveness because it helps exporters to save unnecessary costs associated with tax payment and refund procedures.
6. Increases Global Competitiveness thereby facilitating better pricing of Indian goods and also improving the overall image of Indian exports in the world level market.
7. One Year Validity: Once approved, the LUT is valid for the whole fiscal year, thus minimizing the number of compliance checks.

Conclusion

Filing and renewal of LUT for FY 2025-26 are a mandatory compliance requirement for exporters who want to continue enjoying tax-free export benefits under GST. By following a simple online process on the GST portal, companies can avoid paying IGST, thus improving their cash flow and operational efficiency. The process is to choose the applicable fiscal year, fill in Form GST RFD-11, upload documents, and file the application with a digital signature. In order to avoid tax dues and unnecessary delays, it is essential to get the renewal done by March 31, 2025. In conclusion, the offer of a LUT facilitates export operations, lessens compliance difficulties, and strengthens the global trade competitiveness of Indian exporters.