What an LUT is, and when exporters need it

An LUT or Letter of Undertaking lets an exporter supply goods or services without paying IGST upfront, subject to conditions. It is one of the most important compliance shortcuts for small exporters.

Why it helps

Without an LUT, you may have to pay IGST first and then claim a refund. With an LUT, your working capital does not get stuck in that cycle.

Who uses it

Freelancers, agencies, SaaS companies and goods exporters often use an LUT when they have zero-rated supplies.

What to remember

An LUT is not a one-time set-and-forget document. Make sure it is valid for the relevant period, and that your invoices and returns line up with the export treatment you are claiming.