GST Registration for Exporters LUT, Zero-Rating & Refunds

In practice, yes, if you want the money. Exports are zero-rated rather than exempt, which means no output tax but full input credit entitlement. Without a GSTIN you cannot file a LUT, cannot export without paying integrated tax, and cannot recover the input tax you have already paid on your costs.

An exempt supply carries no output tax and no input credit. A zero-rated supply carries no output tax but full credit on inputs, which is refundable. For an exporter buying taxed inputs, services and logistics, that difference is the entire commercial benefit.

A Letter of Undertaking, filed in Form GST RFD-11, lets you export without paying integrated tax. Notification 37/2017-Central Tax made it available to all registered exporters. It is filed on the portal, is valid for one financial year, and must be filed again each year.

Exports made after expiry cannot go out under the LUT. You either pay integrated tax and claim refund, or you hold shipments until a fresh LUT is filed. Diarise it for the start of each financial year, because this is the most common avoidable problem an exporter hits.

Most exporters use the LUT, because it protects cash flow. The payment route means funding integrated tax on every export invoice and waiting for the refund, which for a regular exporter ties up a meaningful amount of working capital. The payment route suits occasional exporters who prefer less paperwork.

Yes. Supply to an SEZ unit or developer for authorised operations is a zero-rated supply under Section 16 of the IGST Act, on the same footing as export, and can be made under a LUT or on payment of integrated tax with refund.

Below the threshold and with no other Section 24 trigger you are not obliged to. But without registration you cannot file a LUT or claim refund of input tax, so the tax on your software, hardware and professional costs stays a cost. For most exporting freelancers, voluntary registration is the better commercial call.

All six conditions in Section 2(6) of the IGST Act must hold: supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange or in rupees where RBI permits, supplier and recipient not merely establishments of a distinct person, and consideration for the supply. Fail one and it is a domestic supply carrying ordinary tax.

For goods exported on payment of integrated tax, the refund is largely automated against the shipping bill and is usually quick once the return and the shipping bill match. Refund of unutilised credit under the LUT route is applied for in RFD-01 and takes longer, since it goes through processing. Mismatches between GSTR-1, GSTR-3B and the shipping bill are the main cause of delay in both.