GST LUT for Exporters in Indore — Export Without Paying IGST, Protect Cash Flow

MP's commercial capital and the cleanest city in India — Indore has India's largest soyabean processing industry, a major pharma cluster in Pithampur, and a fast-growing IT corridor. For every goods exporter, service exporter, and IT company in Indore, Madhya Pradesh that raises invoices to foreign clients — the GST Letter of Undertaking (LUT) is the single most important compliance document of the financial year. Without a valid LUT, your only option is to pay 18% IGST on every export invoice and wait months for a refund — tying up lakhs of working capital that your business cannot afford to lose. TaxAMC's CA team files LUTs for exporters across Indore — quickly, accurately, and annually — ensuring you never pay IGST on export invoices and never miss an export incentive for lack of a valid LUT.

1. What is GST LUT and How Does It Work for Indore Exporters?

Under GST, exports of goods and services are zero-rated supplies — meaning the GST rate on exports is 0%. However, to export at 0% without paying any GST upfront, you must either:

1. File a Letter of Undertaking (LUT) — a formal declaration on the GST portal promising that you will fulfil all export obligations without paying IGST; OR
2. Execute a Bond — a legal bond (with or without a bank guarantee) committing to pay IGST + penalty if the export conditions are not met; OR
3. Pay IGST and claim a refund — export with IGST payment and file a GST refund claim after the export is completed.

For virtually all regular exporters in Indore, LUT is the best option — it is free, renewable annually, does not require a bank guarantee, and eliminates all IGST cash outflow on exports.

How the LUT mechanism works in practice:

• You file the LUT on the GST portal for the current financial year — TaxAMC does this in April
• Your LUT reference number is noted — this must be quoted on all export invoices during the year
• You raise a zero-rated export invoice to the foreign buyer with 0% IGST — the LUT reference number is mentioned
• Foreign buyer pays in foreign currency — you receive USD/GBP/EUR in your bank account
• No IGST is collected, no IGST is paid, no refund needs to be claimed — zero GST cash flow impact
• The export is declared in GSTR-1 under the "Exports with LUT" category — no GST payment in GSTR-3B for these transactions

2. LUT vs IGST Payment — Cash Flow Comparison for Indore Exporters

The financial advantage of LUT over IGST-paid exports is enormous for any Indore exporter with meaningful export volume:

Metric	Exporting with LUT	Exporting with IGST Payment + Refund
GST on export invoice	0% — zero IGST charged or paid	18% IGST paid to government at time of export
Cash outflow on ₹10L export	₹0	₹1,80,000 locked with government
Refund claim required?	No	Yes — file GST refund claim after export
Average refund waiting period	N/A	30–90 days (can be longer with queries)
Interest cost on blocked capital (₹1.8L for 60 days @ 12%)	₹0	₹3,600 lost per ₹10L export
Annual cash flow on ₹1 crore exports	Fully free — ₹0 locked	₹18,00,000 locked for 60 days average
Compliance effort	Annual LUT filing once — very simple	GST refund application for every shipment — significant effort
Risk	None (if LUT conditions met)	Refund may be queried, delayed, or partially denied

3. Who Can File a GST LUT in Indore?

LUT is available to any GST-registered person who exports goods or services — with one exception:

• ✅ Manufacturers exporting goods — any industry, any product category
• ✅ Trading companies exporting purchased goods — merchant exporters
• ✅ IT and software companies exporting software, SaaS, or technical services
• ✅ Consulting firms billing international clients for professional services
• ✅ Design and creative agencies supplying services to foreign clients
• ✅ Freelancers and individual service providers with foreign clients
• ✅ Engineering service firms — architecture, structural, civil engineering exports
• ✅ Healthcare and telemedicine — medical services to international patients
• ✅ Educational institutions — online courses to foreign students
• ❌ Ineligible: Taxpayers prosecuted under CGST/IGST Act for tax evasion of ₹2.5 crore or more

4. Documents Required for GST LUT Filing in Indore

LUT filing is entirely online on the GST portal — no physical documents are submitted. However, you must provide these to TaxAMC for accurate filing:

5. How TaxAMC Files Your LUT in Indore

• Eligibility check: Our CA team verifies your GST registration status and confirms LUT eligibility before proceeding
• Authorised signatory setup: We ensure the correct person is set up as the authorised signatory on the GST portal — required for LUT acceptance
• DSC verification: Digital Signature Certificate of the signatory verified and linked to the portal if not already done
• LUT application filing: Form GST RFD-11 filed on the GST portal with all required declarations — the taxpayer undertakes to pay IGST + interest if the export conditions are not fulfilled within the allowed time
• LUT reference number: Upon successful filing, the GST portal generates an LUT reference number — shared with you immediately
• Invoice template update: TaxAMC reviews your export invoice template and ensures the correct LUT declaration statement is included for compliance
• Annual renewal reminders: TaxAMC sends renewal reminders every March — and renews your LUT in April before the new financial year's first invoice

Timeline: 1–3 working days after receiving your details

6. LUT for Service Exporters in Indore — IT, Consulting, Freelancers

Service exports are the fastest-growing export category in India — and Indore has a significant base of IT companies, consulting firms, and individual freelancers earning in foreign currency. All of them benefit from LUT.

What qualifies as service export (eligible for LUT) for Indore businesses:

• Software development, maintenance, and testing services to foreign clients
• IT enabled services — BPO, KPO, data analytics, call centre services
• Management and business consulting to international companies
• Legal and financial advisory to foreign entities
• Digital marketing, SEO, content marketing services to foreign clients
• Design services — graphic design, UI/UX, product design for international companies
• Architecture and engineering services — drawings and specifications for projects abroad
• Medical consultation, telemedicine, and healthcare advisory to foreign patients
• Online teaching, e-learning content, course creation for international students
• Video production, content creation, animation for foreign clients
• Research and development services for foreign companies

Conditions for service to qualify as "export" (zero-rated):

• The supplier (your Indore business) must be in India
• The recipient (foreign client) must be outside India
• The place of supply must be outside India
• Payment must be received in convertible foreign exchange (USD, GBP, EUR, etc.) — or in INR credited from a foreign currency account (vostro account)
• The supplier and recipient must not be merely establishments of the same legal entity

7. Annual LUT Renewal — Why It Cannot Be Missed by Indore Exporters

LUT is valid for exactly one financial year — 1 April to 31 March. A new LUT must be filed at the start of every financial year before raising the first export invoice of that year.

Consequences of exporting without a valid (renewed) LUT:

• Invoices raised after March 31st without a new LUT are technically non-zero-rated exports
• IGST can be demanded on all such invoices — with 18% interest from the invoice date
• Export incentive claims (RoDTEP, drawback) may be rejected for invoices without valid LUT
• Banks may flag the foreign remittance as non-compliant if export documentation is incomplete

TaxAMC's annual LUT renewal service for Indore exporters:

• WhatsApp reminder sent every March — well before financial year end
• LUT renewed in the first week of April — before your first new-year invoice
• New LUT reference number shared immediately upon successful renewal
• Invoice template verified for the new year's LUT number

8. What If You Exported Without LUT — IGST Refund Process in Indore

If you have already made exports from Indore without filing an LUT (and with IGST payment), you can claim a GST refund of the IGST paid. However, the refund process is significantly more complex and time-consuming than simply having an LUT in place.

IGST Refund process for Indore exporters:

• Automatic route (goods exports): IGST paid on export invoices is automatically processed for refund by the GST system after the shipping bill is filed at customs — typically 30–60 days if all data matches
• Manual route (service exports): Service exporters must file a formal refund application on the GST portal (Form GST RFD-01) with supporting documents
• Bank realisation requirement: Foreign payment must be received in the bank and confirmed with FIRC before the refund is processed
• Time limit for refund claim: Application must be filed within 2 years of the relevant GST return due date
• Common refund delays: Mismatches between GSTR-1 export data and shipping bill data, FIRC not submitted, bank realisation not complete, officer queries on export documentation

9. Export Incentive Schemes That Require a Valid LUT in Indore

Several government export incentive schemes are only available to exporters who are GST-compliant — including having a valid LUT for zero-rated exports. Missing a LUT can disqualify your Indore business from these significant cash benefits:

Scheme	Benefit	LUT Requirement
RoDTEP (Remission of Duties and Taxes on Exported Products)	Refund of embedded taxes and duties not rebated elsewhere — 0.5% to 4.3% of export value depending on product	Exports must be zero-rated with valid LUT for the shipping bill to be eligible
Advance Authorisation	Duty-free import of raw materials for export production — significant saving on input costs	Exporter must be GST-compliant with valid LUT
EPCG (Export Promotion Capital Goods)	Import capital goods at 0% customs duty against export obligation	Clean GST compliance including valid LUT required
Export oriented unit (EOU) benefits	Duty-free procurement of inputs and capital goods	GST compliance including LUT mandatory
Services Export from India Scheme (SEIS) / successor	Incentive rewards for service exporters	Zero-rated service exports with LUT required

10. Areas We Serve in Indore

TaxAMC provides services across all localities in Indore, including:

• Pithampur Industrial Zone
• Vijay Nagar (Commercial)
• AB Road
• Scheme 54 and 78
• LIG Square
• Palasia
• Super Corridor (IT)

Also serving nearby cities: Bhopal, Ujjain, Dewas, Dhar.

11. Frequently Asked Questions — GST LUT in Indore

Q: How long does LUT filing take in Indore?
1–3 working days after receiving your GSTIN, authorised signatory details, and DSC. TaxAMC files on the GST portal — no physical visit required.

Q: Is LUT free to file?
Yes — there is no government fee for LUT filing. You pay only TaxAMC's professional fee for preparation and filing.

Q: My LUT expired on 31 March — can I raise export invoices in April without a new LUT?
No — you must file the new year's LUT before raising April invoices. TaxAMC renews LUTs for all clients in the first week of April every year.

Q: I am a freelancer/IT professional in Indore earning in USD from foreign clients — do I need an LUT?
Yes — if you are GST registered (above ₹20 lakh turnover), you should file an LUT so your foreign invoices are correctly zero-rated. Without LUT, there's a technical compliance gap. TaxAMC files LUTs for all service exporters in Indore.

Q: What happens if I don't fulfil the export obligation mentioned in the LUT?
If the export is not completed within the allowed time or payment is not received in foreign currency — IGST becomes payable with 18% interest. TaxAMC monitors export completion status and advises on LUT condition fulfilment.

Q: Can I have both LUT and export with IGST in the same financial year?
Yes — some exporters choose to pay IGST on some shipments (if they expect ITC refund to be convenient) and use LUT on others. TaxAMC advises on the optimal approach for your specific situation.