LUT for Exporters: Charge Zero GST on Your SaaS and Service Exports
A Letter of Undertaking lets GST-registered exporters supply goods or services abroad without charging GST. Essential for SaaS and service exporters — here's what it is, how to file it, and the annual renewal.
A Letter of Undertaking (LUT) lets a GST-registered exporter supply goods or services abroad without charging GST — the export is zero-rated, and the LUT is the declaration that lets you skip the tax rather than pay it and claim a refund. For a SaaS or services startup billing overseas customers, filing an LUT is essential: without it you either charge GST you shouldn't, or you pay IGST upfront and wait for a refund. Here's how it works.
Zero-rated, not exempt
Exports (and supplies to SEZs) are zero-rated under GST — taxed at 0% while still letting you claim the input credit on your costs. That last part matters: unlike an exempt supply (where you lose input credit), a zero-rated export lets you recover the GST on your inputs. There are two ways to do a zero-rated export:
- Under LUT (no tax): file an LUT and export without charging IGST, then claim a refund of accumulated input credit (RFD-01).
- With tax: pay IGST on the export and claim it back as a refund.
For most SaaS/service exporters the LUT route is far better — no cash tied up in tax you'll only get back later.
What the LUT is and how to file it
The LUT is an annual declaration filed online on the GST portal (Form GST RFD-11) in which you undertake to fulfil the export conditions. Once accepted, you can export without charging GST for that financial year.
- Who: any GST-registered exporter of goods or services (subject to the eligibility conditions).
- Validity: for the financial year — so it must be renewed every year.
- When: file it at the start of the financial year (or before your first export) so you're covered from your first invoice.
The startup trap: forgetting the annual renewal
The most common LUT mistake is treating it as one-and-done. It lapses at the end of each financial year — so a SaaS exporter who filed once and forgot can find themselves exporting without a valid LUT, which means they should have charged IGST. Renewing the LUT each April is a small annual task with real consequences if missed.
Export services? Get the LUT right, every year
For an exporting startup, the LUT is a once-a-year filing that unlocks GST-free exports and input refunds — and it's easy to forget to renew. ComplianceStack tracks the LUT as an annual obligation for exporters, with a reminder each financial year and the acceptance stored as evidence. Get your free compliance health check. (See also GST compliance for startups.)
FAQs
- What is an LUT in GST?
- A Letter of Undertaking (Form RFD-11) filed by a GST-registered exporter, undertaking to meet export conditions so they can supply goods or services abroad without charging GST, for the financial year.
- Do SaaS exporters need to charge GST?
- No — export of services is zero-rated. With an LUT you export without charging GST and claim refunds of input credit; without one you'd have to pay IGST and claim it back.
- How often do I renew the LUT?
- Every financial year — it's valid for the year and must be re-filed, ideally at the start of the year or before your first export.
- What's the difference between zero-rated and exempt?
- A zero-rated supply (export/SEZ) is taxed at 0% *and* lets you claim input credit; an exempt supply carries no tax but blocks input credit.
This article is general information, not tax, legal or accounting advice. Statutory timelines and thresholds change by notification — confirm applicability and interpretation with your CA, CS, or lawyer before acting.
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