As per the IGST Act, export of goods or services is deemed to be a supply in the course of inter-state trade or commerce. Exports have been defined under “zero rated supply”.
Export cannot be done without following any of the two ways of raising an export invoice, mention either

  • "Supply meant for Export on Payment of IGST"


  • "Supply meant for Export under bond without payment of IGST"

Any exporter paying the IGST can claim refund of such tax paid on the supplied goods or services or both. The applicant has to apply for the refund as per the conditions specified under this act

Supply goods or services, or both, under BOND or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax, and then claim a refund of unutilised input tax credit.

  • This bond or Letter of Undertaking is required to be furnished in Form GST RFD-11 on the GST common portal. This form, GST RFD - 11, will be filed with a bank guarantee equivalent to the amount of IGST, binding himself to pay the tax due along with the interest specified within a period of:
  • Fifteen days after the expiry of three months from the date of issue of the invoice for export, if the goods are not exported out of India;


  • Fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.

Eligibility of Furnishing LUT
Not every registered person supplying goods or services for exports are eligible for furnishing LUT. Following registered person shall be eligible for submission of Letter of Undertaking in place of a bond:

    • Status Holder- A registered person shall be a status holder as specified in paragraph 5 of the Foreign Trade Policy 2015- 2020;


    • Received due foreign inward remittances (min. 10%) - A registered person who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year.

Further, a registered person shall not be prosecuted for any offense under the Central Goods and Services Tax Act, 2017 or under any of the existing laws in case where the amount of tax evaded exceeds two hundred and fifty lakh rupees.
The validity of LUT - Letter of the undertaking shall be valid for twelve months.

Please note that those who does not satisfy above mentioned conditions, would submit bond.

Running bond or Separate bond ?
The exporters shall furnish a running bond (with debit/credit facility), instead of separate bond for each consignment/export. The bond would cover the amount of tax involved in the export based on estimated tax liability as assessed by the exporter himself. The exporter shall ensure that the outstanding tax liability on exports is within the bond amount. In case the bond amount is insufficient to cover the tax liability in yet to be completed exports, the exporter shall furnish a fresh bond to cover such liability.

Furnishing of bond on Non- Judicial Stamp paper - The bond shall be furnished on non- judicial stamp paper of the value as applicable in the State for which bond is being furnished.


  • Bond to be furnished manually to the jurisdictional Deputy / Assistant Commissioner in Form RFD-11 till the module for furnishing same is available on the common portal.
  • To be furnished on non-judicial stamp paper of the value as applicable in the State for which bond is being furnished.
  • Running bond to be furnished on self-assessment basis in GST RFD-11 to cover the tax involved in the export. Exporter to ensure that the bond amount is sufficient to cover the liability, in the case of shortage, fresh bond to be furnished.
  • Jurisdictional Commissioner may decide on the value of bank guarantee. If satisfied with a track record, bank guarantee may be dispensed with.


  • The LUT has to be furnished in duplicate in a financial year in form GST RFD-11. The validity of 12 months.
  • To be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorized by such working partner or Board of Directors of such company or proprietor on the letter head of the registered person.

In the case of supply by an unregistered person (including unregistered job workers), the registered person i.e., the exporter shall be liable to pay GST under reverse charge mechanism. However, the exporter can avail ITC of such GST paid and either utilize the ITC or claim a refund of the same.  


  • In the case of refund of tax on inputs used in exports:
  • Refund of 90% will be granted provisionally within seven days of acknowledgment of refund application.
  • Remaining 10% will be paid within a maximum period of 60 days from the date of receipt of application complete in all respects.
  • Interest @ 6% is payable if a full refund is not granted within 60 days.
  • In the case of refund of IGST paid on exports:
    • Upon receipt of information regarding furnishing of valid return in Form GSTR-3 by the exporter from the common portal, the Customs shall process the claim for refund and an amount equal to the IGST paid in respect of each shipping bill shall be credited to the bank account of the exporter.
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