GST Portal New Functionality: Option to File LUT for FY 2025-26 now Available for Exporters
GST Portal enables filing of LUT for FY 2025-2026
The Goods and Services Tax Network (GSTN) has updated the GST Portal with a new functionality to file Letter of Undertaking (LUT) for FY 2025-2026. If you're in the business of exporting goods or services, the term LUT (Letter of Undertaking) might already be on your radar. It is a straightforward yet powerful tool under the Goods and Services Tax (GST) system that helps exporters breathe...
The Goods and Services Tax Network (GSTN) has updated the GST Portal with a new functionality to file Letter of Undertaking (LUT) for FY 2025-2026.
If you're in the business of exporting goods or services, the term LUT (Letter of Undertaking) might already be on your radar. It is a straightforward yet powerful tool under the Goods and Services Tax (GST) system that helps exporters breathe a little easier by removing the burden of paying taxes upfront.Â
An LUT is a declaration filed by exporters in Form GST RFD-11 on the GST portal.
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What is an LUT?
Think of a Letter of Undertaking (LUT) as a promise you make to the government. By filing an LUT, you commit to exporting your goods or services without charging GST on them and ensuring the earnings come back in convertible foreign exchange within a set timeframe (usually 3 months). All this is done by submitting a simple online form, GST RFD-11, on the GST portal.Â
How Does LUT Affect GST?
Tax-Free Exports: Once you file an LUT, your exports are treated as zero-rated supplies. This means you don’t need to pay GST upfront and can export without the hassle of refunds later.
Better Cash Flow: Since you're not paying taxes upfront, your money stays where it belongs – in your business. This can be a game-changer for small businesses or startups where cash flow is tight.
Less Red Tape: Filing an LUT cuts down the paperwork and delays of claiming refunds, making life simpler for exporters.
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Beware of Defaults: There’s a catch though – if you don’t fulfill the LUT conditions, like receiving export proceeds on time, the government can demand the GST you avoided, along with interest.
In short, LUT under GST is a win-win for businesses and the government. It encourages exports by reducing tax burdens while ensuring accountability.
For exporters, it is a way to keep their operations smooth and stay competitive in the global market.
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