Export invoices under LUT without the paperwork panic
Updated
File a Letter of Undertaking (Form GST RFD-11) each financial year, then raise export invoices without IGST that quote it. Add the shipping bill number, date and port code once customs gives them, and report the export in GSTR-1 table 6A, so your refund is not held up.
Why export refunds get stuck
An export refund is checked by matching three records: your invoice, the shipping bill customs holds, and your GSTR-1. A different invoice number on the shipping bill, a missing port code, or an export reported in the wrong table, and the claim waits while you write letters. The work is not hard. It is three records that must say the same thing.
1. File the LUT before the first export of the year
The LUT is filed online in Form GST RFD-11 and is valid until 31 March. File it in April, before the first export of the financial year, and keep the reference number and date. They go on every invoice under it.
2. Raise the invoice in your buyer’s currency
Bill in the currency you agreed, at the exchange rate you choose under the rules, and keep your books in rupees. Mark the invoice as an export under LUT without payment of IGST, with the LUT reference. Use the same invoice number on the shipping bill your customs broker files. Most mismatches start right here.
3. Add the shipping bill when customs gives it
The shipping bill number, date and port code usually arrive after the invoice. Put them on the invoice the day you get them, not when the return is due.
4. Report it in GSTR-1 table 6A
Exports go in table 6A of GSTR-1, with the shipping bill details, as zero-rated supplies without payment of tax. Check that every export of the month has its shipping bill before you file.
5. Watch the two clocks
Goods must leave India within three months of the invoice date, and the payment must arrive within the time foreign exchange rules allow. Keep a list of exports by date, with their shipping bill and payment received. That one list answers the refund officer’s questions too.
6. Claim the refund of unused credit
Exports under LUT carry no tax, so the GST you paid on inputs can pile up as credit. Claim it as a refund (Form GST RFD-01) once the returns for the period are filed. Clean purchase bills and a reconciled GSTR-2B make the claim quicker.
How EaseDesk helps
On an export invoice in EaseDesk you choose the currency and exchange rate, and whether it goes with payment of IGST or under LUT. An invoice under LUT carries no tax and prints the LUT number and date from your GST registration. Add shipping bill on the invoice takes the number, date and port code. GSTR-1 puts the export in table 6A, and its checks list any export still missing a shipping bill. Your books stay in rupees. EaseDesk does not file the refund application itself; your CA does that on the GST portal from these figures. See GST compliance and adding the shipping bill.
Questions
What is an LUT in GST?
A Letter of Undertaking, filed on the GST portal in Form GST RFD-11, that lets you export goods or services, or supply to an SEZ, without paying IGST. It is valid for one financial year, so file it again each April before the first export.
Export under LUT or with payment of IGST, which is better?
Under LUT no tax is paid, so no money is locked up, and you claim a refund of the input tax credit you could not use. With payment of IGST, you pay the tax and get it back as a refund once the shipping bill and GSTR-1 match. Most small exporters choose LUT to keep cash free.
What must an export invoice under LUT say?
That it is a supply meant for export under a Letter of Undertaking without payment of integrated tax, with the LUT's reference number and date, the buyer's name and address abroad, the destination country, and the shipping bill details once you have them.
How long do I have to export the goods?
Goods must leave India within three months of the invoice date, and payment must arrive within the time foreign exchange rules allow. If either is missed, IGST becomes payable with interest.
Where do the shipping bill details go?
Against the export invoice in GSTR-1 table 6A, with the shipping bill number, date and port code. If they don't match what customs has, the refund is held up.