When goods or services are supplied from India to outside India, it is recognized as the export of goods or services. Under the Goods and Services Tax (GST) law, exporters have two options for the export of goods and services:

With the payment of applicable GST- In this exporters pay IGST and then claim the refund of tax paid.

Without the payment of GST- In this exporters are required to file Letter of Undertaking.

A Letter of Undertaking (LUT) is a document submitted by the exporter, declaring that they have fulfilled all the necessary requirements under GST. The LUT is filed online using FORM GST RFD-11. It is mandatory for exporters to provide an LUT in order to export goods or services without paying IGST. If the exporter fails to submit the LUT, they must either pay IGST or provide an export bond.

Filing of Letter of undertaking(LUT) is convenient than refund mode because of the following benefits

Documents required for filling of Letter of undertaking