When exporters and SEZ suppliers need Form GST RFD-11 LUT under Rule 96A, who must furnish a bond instead, annual FY validity, and how zero-rated supplies without IGST actually work.
By Kanoons Editorial Team · 12 min read · Last verified 2026-10-06
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Summary
Zero-rated supplies under section 16 of the IGST Act (exports and SEZ supplies) can move without charging IGST only when a Letter of Undertaking (LUT) — or, in narrow cases, a bond — on file before the supply. The form is GST RFD-11 under Rule 96A of the CGST Rules. Most exporters use the portal LUT path under Notification No. 37/2017-Central Tax; only persons prosecuted for tax evasion of ₹2.5 crore+ are pushed to the bond track. Verified against Circular 8/8/2017-GST, Notification 37/2017-Central Tax and the GSTN LUT user guide on 6 October 2026.
- Zero-rated without IGST → furnish LUT / bond in Form RFD-11 before the supply (Rule 96A).
- Default facility: LUT for all registered persons except prosecuted ₹2.5 Cr+ tax-evasion cases (Notif. 37/2017 + Circular 8/8/2017).
- LUT is FY-scoped on the GST portal — renew each financial year.
- EOU inward supplies are not zero-rated; SEZ supplies without IGST are.
- Service path: LUT Filing.
Zero-rated supplies in one paragraph
Under the IGST framework, exports and supplies to SEZ units/developers are zero-rated. You may:
1. Supply without payment of IGST under bond / LUT, then claim refund of unutilised ITC where eligible; or 2. Supply with payment of IGST and claim refund of the tax so paid.
LUT is the operational key to option 1 for almost every compliant exporter. Option 2 still needs clean export documentation and a refund file — see GST Refund.
Bond vs LUT — who uses which
| Instrument | Who | Collateral | Practical notes |
|---|---|---|---|
| LUT (RFD-11) | Registered person not prosecuted for tax evasion ≥ ₹2.5 crore | Undertaking only (self-declaration normally accepted; post-facto verification possible) | Portal filing; FY validity |
| Bond (RFD-11) | Prosecuted for tax evasion ≥ ₹2.5 crore under CGST / IGST / existing law | Bond on stamp paper + bank guarantee (Circular 8 describes 15% of bond amount in the master clarification chain) | Running bond covering estimated tax on exports |
Circular 8/8/2017-GST is still the master clarification: Notification 37/2017-Central Tax superseded the narrower Notification 16/2017 status-holder / remittance tests and opened LUT to all exporters subject to the prosecution carve-out.
How to furnish LUT on the portal
1. Confirm you will make zero-rated supplies without IGST in the current FY. 2. Login at www.gst.gov.in → Services → User Services → Furnish Letter of Undertaking (LUT). 3. Complete Form GST RFD-11 for the financial year, with the authorised signatory executing the undertaking (proprietor / working partner / MD / CS / duly authorised person — per Circular 8). 4. Submit with EVC / DSC as applicable; download the acknowledgement. 5. Make the zero-rated supply only after LUT is on record for that FY.
Self-declaration that you have not been prosecuted for the ₹2.5 crore threshold is ordinarily accepted; officers may verify later. Do not file LUT in someone else’s name or for a GSTIN that will not make the supply.
Mid-article CTA: File or renew your GST LUT → Cross-sell: GST Refund, GST Return Filing, GST Registration.
Reporting zero-rated supplies correctly
- Report exports / SEZ supplies in the correct GSTR-1 tables (and pay / adjust via GSTR-3B as the portal design requires for your option).
- Keep shipping bills, export invoices, FIRC / remittance evidence (for services), and SEZ endorsements in the refund / audit file.
- If you are on e-invoicing, generate IRNs for export / SEZ documents as notified — see GST e-invoicing threshold guide.
- Option-with-IGST exporters still need a disciplined refund calendar; LUT exporters need ITC refund hygiene instead of IGST refund hygiene.
SEZ vs EOU — do not mix the labels
Circular 8 is blunt: zero rating is not applicable to supplies to EOUs. Bill an EOU like any other taxable domestic supply unless a separate exemption notification applies to your facts. SEZ supplies without IGST, by contrast, sit inside the zero-rated + LUT design when you choose the without-payment path.
Failure modes that create demand notices
- Exporting without LUT / bond, then discovering Rule 96A exposure when IGST was never paid.
- Using last year’s LUT into April without renewing for the new FY.
- Treating EOU invoices as zero-rated.
- LUT on one GSTIN while invoices go out on another.
- Bond amount too low for the running export tax exposure (bond track only).
Related reading on this site
- How to file GSTR-1
- GST e-invoicing threshold guide
- Input tax credit basics
- E-commerce seller GST / TCS compliance
Primary sources
- Circular No. 8/8/2017-GST (LUT / bond master circular)
- Notification No. 37/2017-Central Tax (LUT facility extended under Rule 96A)
- Rule 96A, CGST Rules, 2017
- GSTN — Furnishing of LUT
- gst.gov.in · cbic-gst.gov.in
Disclaimer
General information only — not legal or tax advice. Kanoons is not a law firm or accounting firm. LUT eligibility, bond / bank-guarantee quantum, SEZ procedural endorsements and refund timelines are fact-specific; confirm against the live notifications, Circular 8 and the GST portal before exporting without IGST. See our Disclaimer.
Frequently asked questions
What is a GST LUT?
A Letter of Undertaking in Form GST RFD-11 under Rule 96A of the CGST Rules. It lets an eligible registered person make zero-rated supplies (exports of goods/services or supplies to SEZ units/developers) without payment of integrated tax, subject to the conditions in the LUT and the IGST Act.
Who can file LUT instead of a bond?
Notification No. 37/2017-Central Tax (read with Circular No. 8/8/2017-GST) extends LUT facility to all registered exporters under Rule 96A except persons who have been prosecuted for tax evasion involving an amount of ₹2.5 crore or more under the CGST Act, IGST Act or existing law. Those prosecuted persons must furnish a bond (with bank guarantee as prescribed).
How long is an LUT valid?
LUT is furnished for a financial year (portal flow: Services → User Services → Furnish Letter of Undertaking). File it before making zero-rated supplies without IGST in that FY, and renew for each new financial year before the first such supply.
Do supplies to EOUs qualify as zero-rated under LUT?
No. Circular 8/8/2017-GST clarifies that zero rating does not apply to supplies to EOUs; those supplies are taxable like other domestic supplies. EOUs themselves can zero-rate their own exports like any other exporter.
Can I export on payment of IGST instead of using LUT?
Yes. Zero-rated supplies may be made on payment of IGST with a subsequent refund claim, or without payment of IGST under bond/LUT. Choose the path that matches your working-capital and refund timeline — LUT avoids locking IGST into the refund queue on every shipment.