Executed software exports without GST LUT

[Khozaima Patel]

I am a proprietership firm which is registered with GST.

In the FY 2024-25 I have executed software exports. I do not have a GST LUT (Letter of Undertaking).

Someone informed me that as a result of the above, I should pay the GST amount for the above exports and then ask for a refund after submitting proof of export (FIRC, etc).

Is this correct? Do I need to do this? Or should I just apply for GST LUT for the current FY (2025-26)?

[Sadanand Bulbule]

Refer CBIC Clarification No.349/74/2017-GST(Pt) Vol-II dated 04/10/2017 for comprehensive details on furnishing of Bond/LuT. Your queries are answered there.

[Khozaima Patel]

Mr Sadanand Bulbule

Thank you for your response. 

I am not a technical person. Can you please translate and let me know in layman terms what it means in my context?

Thank you

[Sadanand Bulbule]

In simple terms, in the absence of declaration of Letter of Undertaking [LuT], you should have paid IGST and then claimed its refund under Section 54[3][i].

Secondly, LuT is a formal declaration in FORM GST RFD-11 prescribed under Rules 96A of the CGST Rules for export of goods/services without payment of tax. It is to be furnished by the exporter of goods/services for each financial year separately and before the end of the March of new Financial Year for export of goods/services as zero rated supplies without the payment of tax. For example, for the FY 2025-26, the declaration in LuT was to be submitted by 31/03/2025.

Anyway consult your jurisdictional GST officer for further needful.

[SUSHIL BANSAL]

Circular No. 125/44/2019-GST dated 18.11.2019

Circular No. 37/11/2018-GST dated 15.3.2018 (clause 4.1)

These two circulars will be quite helpful in the matter

[Khozaima Patel]

Mr Sushil Bansal

Thank you for your response. 

I am not a technical person. Can you please translate and let me know in layman terms what it means in my context? Do I need to deposit IGST and then claim refund? Or should I just forget about it and only apply for LUT for the current FY?

Thank you

[YAGAY andSUN]

Sure, here's a simple explanation in plain English, based on your situation and the government circulars as mentioned hereinabove:

Your Situation:

• You are a proprietorship firm registered under GST.
• In FY 2024-25, you exported software services (which counts as a zero-rated supply under GST law).
• You did not submit a Letter of Undertaking (LUT) for FY 2024-25.
• You're wondering what to do now.

Key Rules (in simple terms):

1. Exports are zero-rated – This means you don’t have to pay GST on exports if you file an LUT in advance for that financial year.
2. If you didn’t file the LUT for that year (FY 2024-25), then as per law, you are supposed to:
   • Pay IGST on the export invoice (yes, even though it’s zero-rated), and
   • Then claim a refund of that IGST after submitting proof of export (like FIRC, invoice, etc.)
3. LUTs are to be filed before 31st March for the upcoming financial year.

So, for FY 2025-26, you should have submitted the LUT before 31st March 2025.

What You Should Do Now (Practical Steps):

🟠 For FY 2024-25 (Past year):

• Since you did not file LUT, the correct legal process is:
  • Calculate the IGST applicable on your export invoices.
  • Pay that IGST to the government.
  • Apply for a refund using supporting documents (FIRC, shipping bill, invoice, etc.).

This is as per Section 54(3)(i) of the GST Act and the CBIC Clarification No. 349/74/2017-GST.

Yes, your friend was right – you need to pay the IGST and claim refund.

🟢 For FY 2025-26 (Current year):

• If you have not yet filed LUT, file it immediately using Form RFD-11 on the GST portal.
• Once LUT is filed, you can export without paying IGST going forward.

Even if you missed the 31st March deadline, the GST portal generally allows filing of LUT after the start of the financial year, but the exports made before filing the LUT may still need IGST payment and refund route.

✅ Summary (One-line Answer):

• For FY 2024-25: Yes, you must pay IGST and then claim a refund, since LUT was not filed.
• For FY 2025-26: File LUT now to avoid paying IGST on future exports.

Let me know if you’d like help filing LUT or applying for the IGST refund.

[KASTURI SETHI]

Para No.44 of Circular No. 125/44/2019-GST, dated 18-11-2019 allows condonation of delay in filing LUT.

"44. Export of goods or services can be made without payment of Integrated tax under the provisions of rule 96A of the CGST Rules. Under the said provisions, an exporter is required to furnish a bond or Letter of Undertaking (LUT) to the jurisdictional Commissioner before effecting zero rated supplies. A detailed procedure for filing of LUT has been specified vide Circular No. 8/8/2017-GST dated 4.10.2017. It has been brought to the notice of the Board that in some cases, such zero-rated supplies were made before filing the LUT and refund claims for unutilized input tax credit got filed. In this regard, it is emphasized that the substantive benefits of zero rating may not be denied where it has been established that exports in terms of the relevant provisions have been made. The delay in furnishing of LUT in such cases may be condoned and the facility for export under LUT may be allowed on ex post facto basis taking into account the facts and circumstances of each case."

[KASTURI SETHI]

Dear Querist,

Regarding exports, Govt. is liberal provided that export is genuine and you must have all documentary evidences to prove your genuineness and bona fides to the effect that export has actually taken place.

The ultimate purpose of LUT is to safeguard Govt. revenue. LUT is equal to bond without security deposit. 

[Shilpi Jain]

You need not pay GST on the export of software just because you have not applied for the LUT. 

This form for FY 24-25 will not be available now online on gst portal to file. You can file this for FY 25-26.

For 24-25 you can take print of the Form GST RFD-11, fill it and send it along with a covering letter asking the department officer to condone the delay in applying for LUT.

You can get an acknowldeged copy of the said letter for your records and the matter ends there.

Mere procedural delays cannot lead to payment of GST on exports.

[KASTURI SETHI]

I concur with the views of Madam Shilpi Jain.

[Khozaima Patel]

Thank you everyone for your response. Most appreciated.

AI Summary

Proprietorship Firm Navigates Export Service Compliance Without LUT, Seeks Expert Guidance on IGST and Refund Procedures A proprietorship firm exported software services in FY 2024-25 without obtaining a GST Letter of Undertaking (LUT). Discussion forum participants advised the firm to pay IGST and claim refund for exports made without LUT. Multiple experts suggested filing LUT for FY 2025-26, providing documentary evidence of genuine exports, and potentially seeking ex-post facto condonation of delay in LUT filing through jurisdictional GST authorities.