Export Invoice Under LUT: How to Bill Exports Without Paying IGST

Exports are zero-rated under GST. That means you can sell abroad without the buyer bearing Indian tax, either by paying IGST and claiming it back, or by exporting without paying IGST under a Letter of Undertaking (LUT). Most small and mid-sized exporters choose the LUT route because it avoids blocking cash in tax refunds.

The invoice is where the LUT route becomes visible. Rule 46 requires a specific endorsement and a few changed fields. This guide covers the LUT itself, the export invoice format, time limits under Rule 96A, and a fully worked example. For the commercial side of export paperwork (currency, Incoterms and documents for overseas buyers), see export invoice format.

What is an LUT under GST?

A Letter of Undertaking is a declaration filed in FORM GST RFD-11 under Rule 96A of the CGST Rules. By filing it, the exporter undertakes to:

• export the goods within three months from the date of the export invoice (or a further period the Commissioner allows); and
• for services and other cases, receive payment in convertible foreign exchange, or in Indian rupees where permitted by the RBI, within the prescribed period (generally one year from the invoice date, or as allowed under FEMA);

failing which it will pay the tax due with interest under Section 50(1) within fifteen days after the relevant period ends.

An LUT is filed for a financial year on the GST portal. Exporters who do not meet the conditions for an LUT can furnish a bond instead, which may need a bank guarantee.

Route	Tax paid at export?	Refund claimed	Cash flow
Export under LUT	No IGST	Refund of unutilised input tax credit	Better: no tax outflow on exports
Export under bond	No IGST	Refund of unutilised input tax credit	Similar, but bond/bank guarantee needed
Export on payment of IGST	Yes	Refund of IGST paid	Tax paid first, recovered later

Refunds are covered in GST refund process.

What must an export invoice under LUT contain?

An export invoice is a tax invoice under Rule 46, so it carries the normal particulars: supplier name, address and GSTIN; serial number; date; HSN/SAC; description; quantity and unit; value; and signature. The full list is in mandatory fields in a GST invoice.

The export proviso to Rule 46 then changes two things.

1. The mandatory endorsement

The invoice must carry one of two endorsements. Under LUT or bond:

SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX

On payment of IGST:

SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX

2. Recipient details

In place of the domestic clause for unregistered buyers, the invoice must show:

1. Name and address of the recipient
2. Address of delivery
3. Name of the country of destination

What else exporters usually add

These are not listed in Rule 46 but are common practice and useful for customs, banks and the buyer:

• LUT acknowledgement reference number and date
• Currency of the transaction with the exchange rate used for the INR value
• Port of loading, port of discharge and shipping bill number (once known)
• Incoterms such as FOB or CIF
• Buyer's order reference

Worked example: a Moradabad brassware exporter

A Moradabad handicrafts exporter (registered in Uttar Pradesh) has filed an LUT for FY 2026-27. On 14 September 2026 it ships to a buyer in Hamburg, Germany.

Item	HSN	Qty	Unit price (USD)	Value (USD)
Brass decorative bowls	7418	600 NOS	12.50	7,500.00
Brass candle stands	7418	400 NOS	18.00	7,200.00
Total FOB				14,700.00

Exchange rate used for the invoice: say ₹84.00 per USD (use the rate your adviser and customs process require).

• INR value = 14,700 × 84 = ₹12,34,800
• IGST: nil (export under LUT)
• If the same shipment had gone on payment of IGST at 18%, IGST would have been 12,34,800 × 18% = ₹2,22,264, recoverable later as a refund.

Invoice header details

• Invoice EXP/26-27/0037 dated 14 September 2026
• Recipient: buyer's name and Hamburg address
• Delivery address: buyer's warehouse, Hamburg
• Country of destination: Germany
• Endorsement: "SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX"
• LUT reference: ARN and date from the portal

Rule 96A clock: the goods must be exported within three months of 14 September 2026, that is, by 14 December 2026. If they are not, the exporter pays the tax with interest within fifteen days after that period, unless the Commissioner allows more time.

Worked example: an exporter of services

A Kochi software firm with an LUT bills a client in Toronto for app development on 30 September 2026: CAD 20,000. The invoice carries SAC 9983, the LUT endorsement, the client's name and address and "Country of destination: Canada", and no IGST.

Because services are exported, the condition that matters is receiving the payment in convertible foreign exchange (or in rupees where the RBI permits) within the period in Rule 96A. Rule 47's 30-day limit for issuing service invoices still applies.

How do you raise an export invoice under LUT step by step?

1. File the LUT in FORM GST RFD-11 on the GST portal for the financial year, before the first export.
2. Set up an export series such as EXP/26-27/0001; see GST invoice number series rules.
3. Create the invoice with all Rule 46 particulars, using the buyer's overseas address and the country of destination.
4. Print the LUT endorsement exactly as worded in Rule 46.
5. Show IGST as nil and include the INR value with the exchange rate.
6. Generate the IRN if you are an e-invoice taxpayer.
7. Generate the e-way bill for movement to the port, if the e-way bill rules require one.
8. File the shipping bill with customs, quoting the invoice.
9. Report in GSTR-1 under exports without payment of tax, with shipping bill details where available. See the GSTR-1 filing guide.
10. Track the Rule 96A deadline for each invoice until export (goods) or payment (services) is complete.

Billing Software by Betterwork supports multi-currency invoices, prints the LUT endorsement on export invoices automatically and generates the IRN for e-invoice users.

How do you track Rule 96A deadlines in practice?

The LUT is a promise, and Rule 96A puts a clock on it. Exporters who ship regularly can lose track of a few invoices, especially when a shipment is held at the port or a buyer delays payment. A simple tracker solves this:

Invoice	Date	Type	Deadline	Event that closes it	Status
EXP/26-27/0037	14 Sep 2026	Goods	14 Dec 2026	Shipping bill / export	Exported 19 Sep
EXP/26-27/0041	30 Sep 2026	Services	One year (or FEMA period)	Foreign exchange received	Awaiting payment
EXP/26-27/0044	3 Oct 2026	Goods	3 Jan 2027	Shipping bill / export	At port

Review it monthly:

1. Close goods invoices once the shipping bill confirms export.
2. Chase overdue payments for services well before the period runs out, and keep bank realisation evidence.
3. Escalate any goods invoice still unshipped after two months, so you can request more time or plan for the tax and interest if needed.
4. Match with refunds. Your refund claim for unutilised input tax credit depends on these export records, so the tracker doubles as refund working.

What changes for exports on payment of IGST?

Some exporters choose to pay IGST and claim it back, for example when an LUT is not in place for the year. The invoice then:

• uses the "ON PAYMENT OF INTEGRATED TAX" endorsement;
• shows IGST at the applicable rate on the INR value; and
• is reported in GSTR-1 as an export with payment of tax.

The tax is paid through GSTR-3B like any other liability and claimed back through the refund route. The extra step and the cash blocked until the refund arrives are why LUT is usually the better option for regular exporters.

Supplies to SEZ units: what is the same and what is different?

Supplies to an SEZ unit or developer for authorised operations are also zero-rated, and the same Rule 46 endorsement wording covers them. The difference is in the recipient details: an SEZ unit is usually registered in India, so the invoice shows its GSTIN and Indian address rather than a foreign country. Treat SEZ invoices as a separate category in your billing setup so the endorsement and return reporting come out right.

Common mistakes

• Exporting without a current-year LUT. It must be filed for each financial year.
• Wrong or abbreviated endorsement, such as "Export under LUT" instead of the Rule 46 wording.
• Missing country of destination.
• Charging IGST on an LUT invoice or printing an IGST column with a value.
• Ignoring the three-month export window when shipments are delayed.
• Mixing export and domestic invoices in one series, which complicates GSTR-1 and refunds.
• No exchange rate shown with the foreign currency value.
• Treating exports as exempt and issuing a bill of supply. Exports are taxable at zero rate and need a tax invoice; see tax invoice vs bill of supply.

Key takeaways

• An LUT (FORM GST RFD-11) lets you export without paying IGST; file it each financial year.
• An export invoice is a tax invoice with a mandatory Rule 46 endorsement and the country of destination.
• Goods must be exported within three months of the invoice date; services need foreign exchange receipt within the prescribed period.
• Report LUT exports in GSTR-1 as exports without payment of tax.
• Keep a separate export series and track each invoice to its shipping bill or payment.

This guide is general information, not tax advice. Rules last checked on 20 October 2026; confirm with your tax professional for your situation.