Export of Goods under GST | Gst export goods without IGST under LUT

 

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Export of Goods under GST

Planning to export goods from India? Great! Under the GST regime, exports are treated as zero-rated supplies, which means you pay no GST and can claim back taxes on your inputs. Let’s break it down in simple terms.

What Does “Zero-Rated Supply” Mean?

• Zero-rated, not exempt: Though no GST is charged on exports, you can still claim input tax credit (ITC) on materials and services used to produce export goods.
• This ensures your products stay globally competitive.

Two Ways to Export Under GST

1. Export Without IGST: Use LUT/Bond

• Export goods using a Letter of Undertaking (LUT) or bond instead of paying IGST.
• You then claim a refund for unutilized ITC paid on your inputs.
• LUT is valid for a financial year and must be filed before export.

2. Export With IGST: Pay Now, Refund Later

• Pay IGST when exporting and later claim a refund of that IGST.
• Your Shipping Bill acts as the refund application – no separate Form RFD‑01 needed.
• Refund usually processed within 60 days.

Key Steps & Documents for Export

• Register under GST - compulsory for exporters, even below ₹20 lakh turnover .
• Obtain IEC & other codes - AN, Import Export Code, RCMC etc.
• Prepare tax invoice - include GSTIN, LUT/bond mention, HSN codes, etc.
• File LUT in form RFD - 11 if exporting without IGST.
• Export through customs - file the Shipping Bill and get export manifest.
• Pay IGST or not - choose the LUT route or pay IGST.
• Claim refund - through shipping bill (IGST route) or Form RFD‑01 (LUT route.

Advantages of Exporting Goods Under GST

• No GST outflow: Exports are zero-rated, minimizing your GST burden.
• Recover input tax: Get back the GST you paid on inputs.
• Streamlined compliance: One unified system with common processes.
• Cash flow friendly: Especially with the LUT route—no upfront GST payment.

Possible Challenges

• LUT valid for one year only—must renew annually.
• Careful documentation required—any gap can delay refunds.
• If LUT route fails (e.g., goods not shipped in 90 days), you must pay tax + interest.
• You must register under GST if exporting goods, even with turnover under ₹20 lakh.

FAQs: Export of Goods under GST

What is export under GST?

Export of goods means supplying goods from India to outside — treated as zero-rated, allowing tax refunds.

Do I need GST registration to export goods?

Yes, GST registration is mandatory for exporters, regardless of turnover.

What is LUT?

A Letter of Undertaking (LUT) allows tax-free exports. You claim refunds of unutilized ITC instead of paying IGST.

How fast do I get refunds?

Refunds typically process within 60 days after export documents are matched.

What happens if goods aren’t exported in time?

GST + interest become payable if exports don’t take place within the stipulated period under LUT/bond.

What documents are must-haves?

GST invoice, LUT/bond, Shipping Bill, export manifest and proof of shipment.

Is it better to pay IGST or use LUT?

LUT is preferred—no upfront GST payment. But if you have leftover ITC, paying IGST and claiming refund works too.

Final Thoughts

Exporting goods under GST offers a smooth path with zero tax on exports, ITC benefits, and faster refunds. Choose the LUT route for best cash flow, file documents on time, and enjoy hassle-free international trade.