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What is a LUT Certificate

What is a LUT Certificate?

Knowing what is a LUT certificate helps in managing country-based tax intricacies. However, it might seem like a menace for enterprises operating in the global trade and commerce sphere.

The certificate of Letter of Undertaking (LUT) is a crucial document for Indian exporters. It greatly facilitates tax-efficient export activities.

Our tax advisory services LLC helps you understand what is a LUT certificate, its alternatives in the U.S., and its benefits.

Global-View of Export Certifications

The idea of an LUT certificate is exclusive to India. However, other countries have their own systems in place to assist exporters and promote tax-efficient commerce.

These systems differ greatly based on the commerce and tax rules of the nation.

United States

Exporters in the U.S. are eligible for several programs and certifications, including:

Foreign Trade Zones (FTZs)

These are designated areas. Here, products can be manufactured, imported, handled, and exported again without the need for customs officials to intervene. As a result, customs fees may be postponed, decreased, or eliminated.

Export Trade Certificates of Review

The U.S. Department of Commerce issues Export Trade Certificates of Review to shield export businesses from antitrust regulations.

Eligibility Criteria for the LUT Certificate

Only some companies are eligible for a LUT certificate. To qualify, an exporter has to fulfill specific requirements:

Zero Tax Default

No reason existed to prosecute the exporter for tax evasion or GST payment default.

Positive Track Record

The exporter should have a spotless history with the GST authorities. It should demonstrate that their prior tax returns and payments were made on time.

Regular Exporter

Exporters with a steady export history usually receive LUT certifications.

What are the Benefits of LUT?

For exporters, a LUT certificate has many advantages:

Cash Flow Management

Doing away with the requirement to pay IGST beforehand facilitates improved cash flow management.

Simplified Compliance

LUT lessens the paperwork needed to submit an IGST refund claim.

Operational Efficiency

Simplifies the export procedure to increase operational efficiency.


The cost and complexity of export transactions are lower, making Indian goods more competitive in the international market.

What is the Procedure for LUT Certificate?

Obtaining a LUT certificate entails the following steps:

Online Application

Exporters are required to use the GST site to submit their online application.

Form GST RFD-11

This form, which needs to be correctly completed and filed, is used to apply for the LUT.


Exporters must provide supporting documentation with their application, including GST returns, export data from the preceding year, and any pertinent certificates.


Once the application is submitted, the GST authorities assess it. If all requirements are satisfied, the LUT certificate is authorized and granted.

Contact our tax consultancy services here.

The Bottom Line

Indian exporters must learn what is a LUT certificate to export goods and services without paying IGST upfront. The LUT certificate facilitates exporting, improves liquidity, and helps a company stay competitive in the worldwide market. By comprehending and utilizing the LUT certificate, exporters can significantly reduce tax payments and boost business efficiency.