It's April 30, 2026 — the practical deadline to file your Letter of Undertaking for FY 2026-27. Without a fresh LUT, your next zero-rated export invoice forces you to either pay IGST (and chase the refund for months) or export under bond. Both are avoidable in the next 30 minutes. This is the exact checklist we walk our exporter clients through, with the rejection traps that catch people every year.
What an LUT actually does
A Letter of Undertaking (Form GST RFD-11) is your written declaration that you'll fulfil the conditions for exporting goods or services without paying IGST. It's required under Rule 96A of the CGST Rules. Once accepted, every export invoice you issue in FY 2026-27 can be zero-rated — no IGST on the invoice, no refund cycle to chase. Without an LUT in place, you have two worse options: pay IGST and apply for a refund (typical wait: 60-90 days, sometimes longer), or execute a bond with bank guarantee (paperwork-heavy, banker time, fees).
The 5 most common rejection reasons
These are the ones we see every April across 30+ exporter clients. Each is preventable in under 5 minutes if you know to check.
The 30-minute walkthrough
Block 30 minutes. Have your DSC, IEC, and two witness names handy.
Post-filing software updates exporters always forget
This is the part most LUT articles skip. Once your LUT is accepted, three things in your billing stack need to update.
- Export invoice template: The footer should now read "LUT No: [your ARN] dated [LUT submission date]" alongside the existing "Supply meant for export under LUT without payment of IGST" annotation. Tally users: edit the invoice voucher template under Display > Statutory > GST > Configure. Zoho Books users: Settings > Templates > Invoices > Edit > Footer.
- Tax type on export invoices: Every export invoice for FY 2026-27 should have the GST type set to "Without Payment of Tax" or equivalent. In Tally, this is configured at ledger level for the buyer. In Zoho Books, set the customer's GST treatment to "Overseas".
- e-Invoicing for exports: Exports above the e-invoice threshold (₹5 Cr AATO from April 2026) require IRN. The export type field in the IRP payload must be set correctly: "EXPWP" (with payment) or "EXPWOP" (without payment, i.e., under LUT). Most ERPs default to EXPWP — change to EXPWOP for LUT exports.
- Shipping bill cross-reference: Update your CHA's checklist to include the LUT ARN. Customs systems cross-reference LUT status with shipping bills for IGST drawback eligibility. Mismatch causes drawback delays.
- Refund tracking spreadsheet: If you've been chasing IGST refunds from FY 2025-26 because you didn't have an LUT then, separate them from FY 2026-27 zero-rated exports in your tracker. Different rules, different forms (RFD-01 vs RFD-11A).
- Bank advice format: Some authorised dealers (banks) ask for the LUT acknowledgement when releasing inward remittances. Save the LUT PDF in a shared folder accessible to your banker.
- SEZ supplies: Supplies to SEZ units (not just exports out of India) also fall under zero-rating with LUT. If you sell to SEZ-registered buyers, the same LUT covers it — but make sure your invoice GSTIN-state combination correctly identifies the SEZ unit.
When NOT to file an LUT
Three cases where an LUT is the wrong choice or unnecessary:
Real example — a Surat textile exporter, 24 staff
Client: a Surat-based textile exporter shipping to Dubai and Lagos. FY 2025-26 turnover ~₹14 Cr. Files LUT every year, but every year there's a different glitch.
- What we found this April:
- Their authorised signatory's DSC expired on April 18 — invisible to them until they hit submit and got the error.
- Their IEC was renewed in November 2025 with a slightly different format (extra zero) — never reflected on the GST portal.
- They were planning to use their dispatch manager as a witness — same person was already an authorised signatory (not allowed).
We renewed the DSC in 90 minutes (online via eMudhra), updated IEC linkage on the GST portal, and got two genuine third-party witnesses (their CA and their banker). LUT submitted at 4:12pm; deemed approved at 11am two working days later.
Their first export invoice for FY 2026-27 went out on April 22 with no IGST and the LUT ARN in the footer. The CHA's drawback claim cleared in 9 days — versus 47 days for last year when the LUT had been queried.
For ongoing reading, r/IndiaBusiness has running threads every April from frustrated exporters who hit the rejection traps. Worth scanning before you file.
FAQ
Can I file LUT after April 30?
Yes — the GST portal accepts LUT applications throughout the year. But any export invoice issued before LUT acceptance is at risk: the supply is technically subject to IGST until the LUT covers you. File before your first FY 2026-27 export.
Is LUT the same as a bond?
No. An LUT is a self-declaration with two witnesses; no bank guarantee, no money tied up. A bond is required for exporters who don't qualify for LUT (e.g., past prosecution under tax laws involving evasion above ₹2.5 Cr) and requires a bank guarantee of 15% of the bond value.
What is "deemed approval"?
If a tax officer doesn't take any action on your LUT application within 3 working days of submission, the portal auto-marks it as "Deemed Approved". Your LUT is valid from that point, even without an explicit acceptance order.
Does LUT expire?
Yes, every financial year. An LUT filed for FY 2026-27 is valid only for exports made between April 1, 2026 and March 31, 2027. You must file fresh for FY 2027-28.
Can my employee be a witness?
The CGST Rules don't explicitly prohibit it, but in practice officers prefer two unrelated parties — typically your CA, your banker, or another professional advisor. A subordinate employee witnessing their own employer's LUT looks weak.
What happens if my LUT is rejected?
You receive a rejection notice with the reason on email and on the portal. You can either fix the issue and re-file (most common) or appeal. Don't issue export invoices in the gap — those will be treated as taxable supplies subject to IGST.
Is LUT needed for service exports too?
Yes. The CGST Act treats export of goods and export of services equivalently for zero-rating. The only difference is the realisation timeline: 12 months from the date of issue of invoice. Software exporters, freelance designers, content writers selling to overseas clients all need an LUT.
Want Your Export Billing Software Updated for FY27?
We update Tally Prime, Zoho Books, BUSY, or your custom invoicing app with the FY 2026-27 LUT details — invoice templates, IRP export-type flags, customer GST treatment, drawback tracking. Typical scope: 2-4 hours, fixed fee. Suitable for goods and services exporters with up to ₹50 Cr turnover. Includes a 15-min demo call.
Book a Software Update CallEmail contact@softechinfra.com if you want our LUT-rejection checklist sent over before you start the filing — saves another 10 minutes of debugging.
