EXPORT OF GOODS - OPTING BOTH LUT AND IGST PAYMENT SIMULTANEOUSLY

[Raghunandhaanan rvi]

Dear Sir, 

An exporter opts to export goods under LUT without paying IGST. The LUT was registered and accepted by the GST office and is valid for 12 months.

This means the exporter can export goods under LUT until the validity period expires. During the LUTs validity period, he wishes to export a few consignments with IGST paid.

My questions are:

1. Can exports be routed under IGST while LUT remains valid under GST? I understand that both options cannot be used at the same time. Is this legally permissible?

2. If both options are available for an exporter to use simultaneously, then why is a LUT prescribed with a validity of 12 months?

3. Are there circulars or notifications clarifying these points?

Request your expert views and opinions in this regard.

[Sadanand Bulbule]

Dear Sir

An exporter with a valid LUT can still choose to export some consignments on payment of IGST and claim refund.

The LUT only permits export without IGST—it doesn’t mandate it for all exports.

2.  The 12-month validity of LUT is just an administrative measure for yearly review; it doesn’t restrict you from using the IGST route during that period.

3.  References:

Rule 96 & 96A of CGST Rules, 2017.

Circular No. 125/44/2019-GST (refund procedures)

Notification No. 16/2017-CT, as amended (LUT provisions) 

 In short, LUT and IGST routes can coexist; exporter may opt either per shipment.

[Raghunandhaanan rvi]

Sadanand Bulbule Ji

Thank you, Sir, for your swift response. 

[Shilpi Jain]

Yes both options will be available. Also this was the modus operandi under Excise also i.e. before implementation of GST.

AI Summary

Exporters may use LUT or pay IGST per shipment and claim refunds, even while LUT remains valid. An exporter holding a valid Letter of Undertaking (LUT) may nonetheless elect, for particular consignments, to pay IGST and claim refund; the LUT permits export without IGST but does not mandate exclusive use during its validity. The LUT's 12 month term is an administrative validity period for review and renewal and does not prevent choosing the IGST plus refund route while the LUT remains in force.