GST · Glossary
LUT (Letter of Undertaking)
Undertaking that lets exporters supply zero-rated GST services without paying tax.
Updated 2026-10-08Source: Income-tax Act · CGST Act · CBDT/CBIC
What it means
A Letter of Undertaking is a one-page declaration filed annually on the GST portal under Rule 96A of the CGST Rules, 2017 (read with Section 16 of the IGST Act, 2017) that allows GST-registered exporters of services (including freelancers serving foreign clients) to invoice at zero GST. Without an LUT, you would have to either pay IGST on the invoice and claim a refund later, or charge IGST and claim refund — both add cash-flow lag.
LUT eligibility: GST-registered exporters of goods or services. An LUT covers one financial year, so file a fresh one for each year before raising that year's first export invoice. Most Indian freelancers serving Upwork, Fiverr, or direct foreign clients file LUT in their first GST year and renew yearly.
A worked example
Arjun files LUT on 5 April 2026 for FY 2026-27. His US client pays USD 2,500 — invoice raised at 0% IGST under the LUT. FIRC arrives 3 weeks later; no upfront tax paid, no refund chase.
File LUT before raising the first export invoice of the FY — invoices issued before the LUT was active need IGST paid + refund, even if you file the LUT the same week.
Run it on your own numbersFree GST Invoice Generator — no signup.Going deeper: GST on Export of Services Without an LUT: What It Costs and What You Can Still Do — 9 min read.
Look up the details
- GST rates & SAC codes — the rate and SAC for any service.
- All 28 terms — the full glossary, by category.
Income-tax entries cite the Income-tax Act 1961, which governs FY 2025–26 (the return filed in 2026); from tax year 2026–27 the Income-tax Act 2025 applies, with new section numbers shown where we give them. GST law is unchanged. General information, not tax advice; verify with your CA before you file.
Related terms
Compliance without the vocabulary
Learn it once, or never learn it.
HourSlip works out the GST on each invoice, logs every TDS deduction and estimates your advance-tax instalments — you check the numbers, and the glossary stays optional.
• No card required• Export your data as CSV