FreeComplianceLUT under GST: exporting services without paying IGST
Exports are zero-rated under GST. A registered exporter can either pay IGST and claim a refund, or export without paying tax by filing a Letter of Undertaking (LUT) in form RFD-11. Most software and services startups choose the LUT route.
When a supply counts as export of services
Under Section 2(6) of the IGST Act, all of these must be true:
- 1.The supplier is located in India.
- 2.The recipient is located outside India.
- 3.The place of supply is outside India.
- 4.Payment is received in convertible foreign exchange (or in Indian rupees where RBI permits).
- 5.The supplier and recipient are not merely establishments of the same person.
Filing the LUT
- File RFD-11 on the GST portal before exporting, for each financial year.
- Signed by the authorised signatory, with two independent witnesses.
- Valid for the whole financial year.
- Invoices must state "Supply meant for export under LUT without payment of IGST".
Frequently asked questions
This guide is general information, not legal advice. Government fees and procedures change; confirm current figures before you file.
- GST registration threshold: when is GST registration mandatory?
GST registration limits for goods and services, special category states, and the cases where registration is compulsory regardless of turnover.
- Input tax credit under GST: conditions, blocked credits and time limits
How input tax credit works under GST, the conditions in Section 16, blocked credits in Section 17(5), and the deadline to claim it.
- GST invoice format: mandatory fields and rules
What a GST tax invoice must contain under Rule 46, HSN/SAC code rules, invoice numbering, and when to issue a bill of supply.