LUT Bond for Exporters in India

LUT / Bond for Exports (Under GST)

What is LUT?

LUT (Letter of Undertaking) is a declaration furnished by an exporter to the GST department stating that they will export goods or services without payment of IGST and comply with GST rules.

It allows exporters to avoid blocking working capital by not paying IGST upfront.

What is a Bond?

A Bond is a financial guarantee furnished when an exporter is not eligible to file LUT.
It requires a bank guarantee as security.

📌 Most exporters file LUT; Bond is required only in special cases.

Why is LUT / Bond Required?

• ✅ To export goods or services without payment of IGST

• ✅ To improve cash flow

• ✅ To simplify GST export compliance

• ✅ To avoid IGST refund process

Who Can File LUT?

• Registered exporters under GST

• Exporters of goods

• Exporters of services

• SEZ suppliers

📌 All exporters can file LUT except those prosecuted for tax evasion above prescribed limits.

Validity of LUT

• Valid for one financial year

• Must be renewed every year

Documents Required for LUT Filing

• GST Registration Certificate

• PAN Card

• IEC (Import Export Code)

• Authorized signatory details

• Digital Signature / EVC

Process of Filing LUT

1. Login to GST portal

2. Select LUT option (Form GST RFD-11)

3. Fill required details

4. Submit using DSC or EVC

⏱️ Timeline: Same day approval (online)

Bond Filing Process (If LUT Not Allowed)

1. Estimate tax liability

2. Execute bond on non-judicial stamp paper

3. Submit bank guarantee

4. Approval by GST officer

Important Conditions

• Exports must be completed within 3 months (goods)

• Export proceeds must be realized within prescribed period

• Failure leads to payment of tax with interest

Difference Between LUT and Bond