If your Chennai business sells services or goods to clients outside India, a Letter of Undertaking (LUT) is one of the most valuable and most overlooked GST filings available to you.
What an LUT actually does
Normally, when you export goods or services, GST law still treats it as a taxable supply, just at a zero rate, which means you would otherwise need to pay IGST upfront and then claim a refund later. An LUT lets you skip that entire cycle. You export without paying IGST at all, provided you have filed a valid LUT for the financial year.
Who this benefits the most
IT consultants and freelancers serving overseas clients, garment and textile exporters, and any Chennai business invoicing in foreign currency all benefit directly. Without an LUT, you are either paying tax you should not have to pay upfront, or filing repeated refund claims that tie up cash for months.
The filing process, in practice
LUT is filed online through the GST portal using Form GST RFD 11, valid for one financial year at a time, meaning it needs to be renewed every year before your first export invoice of that year. The form itself is short, but it requires you to furnish details of two independent witnesses and confirm you have not been prosecuted for tax evasion above a certain threshold.
What happens if you forget to renew it
If your LUT lapses and you continue invoicing exports without one, technically you should be charging and paying IGST on those invoices, which most businesses discover only when preparing their annual return, at which point interest may apply on the delayed tax payment. Setting a calendar reminder at the start of every financial year avoids this entirely.
A short checklist for exporters
- File your LUT at the very start of each financial year, before your first export invoice
- Keep proof of export (shipping bills, bank realization certificates, or client invoices with foreign remittance proof) organized monthly, not just at year end
- Reconcile foreign remittances against invoices raised so nothing falls through during an audit
If you export goods or services from Chennai and want your LUT filed correctly and renewed on time every year without you having to track the deadline yourself, C S Rushil & Co. handles this as part of ongoing GST compliance. Get in touch for a free consultation.