Learn The Latest LUT Features in FY 2025-26

The latest updates to the Letter of Undertaking (LUT) process bring more ease and efficiency for exporters under GST. With smoother online filing and better portal accessibility, businesses can continue exporting goods or services without paying tax upfront. These changes help improve cash flow, avoid paperwork hassles, and ensure uninterrupted trade compliance. It is now simpler than ever to stay GST-compliant while growing in global markets. This blog will provide you with the latest LUT features for FY 2025-26

What is a Letter of Undertaking in GST?

A Letter of Undertaking (LUT) under GST is a declaration filed by exporters to supply goods or services without paying IGST (Integrated Goods and Services Tax). It allows businesses to make zero-rated exports without locking working capital in tax payments. LUT must be filed on the GST portal using Form RFD-11 and is valid for one financial year. Only registered taxpayers with a clean compliance record (no serious tax evasion or pending dues) can use this benefit. GST LUT filing simplifies export procedures, improves cash flow, and avoids the need for bank guarantees or bonds.

Who Should File LUT for FY 2025–26?

Exporters and suppliers to Special Economic Zones (SEZs) must file a Letter of Undertaking (LUT) for FY 2025–26 to enjoy zero-rated benefits under GST without paying Integrated Goods and Services Tax (IGST) upfront. Eligible businesses include any GST-registered person engaged in exporting goods or providing services abroad or to SEZ units. It also covers “deemed exports” under GST.

However, LUT benefits are only available to taxpayers with no major tax violations—specifically, no prosecution for evading tax over Rs. 2.5 crore—and no pending refund claims under GST. Filing must be done on the GST portal using Form RFD 11 before starting export transactions or by March 31, 2025—whichever comes first. Missing this can mean losing benefits, needing to pay IGST upfront or submit bonds, and facing export delays.

The Latest LUT Features for FY 2025–26

The following details include the latest features in LUT for 2025-26:

• LUT Form Now Active for FY 2025–26: The GST portal has activated the Form RFD 11 for LUT submission, allowing exporters to apply online before March 31, 2025, to continue zero-rated export benefits next year. This ensures exporters don’t face disruptions in trade.
• Streamlined Online Filing: You can now file or renew your LUT directly from the GST dashboard under Services → User Services → Furnish Letter of Undertaking, select the new financial year, upload the previous LUT (if required), tick declarations, and e-sign with DSC or EVC.
• Better Cash Flow & Operational Ease: Filing an LUT removes the need to pay IGST on exports upfront. This avoids waiting on long tax refunds and helps maintain smooth invoicing and international transactions.
• Zero Paperwork for Bonds or Bank Guarantees: With an active LUT, exporters and SEZ suppliers are freed from the process of seeking bonds or bank guarantees—this reduces administrative burden and costs.
• Annual Validity & Seamless Transition: Every LUT is valid for the chosen financial year (April–March). You must renew it annually, before crossing into the new year or starting any exports or SEZ supplies, to maintain seamless compliance.
• Penalty Safeguards and Workflows: If LUT isn’t filed before exports begin, IGST must be paid upfront, along with interest, and you lose zero-rate benefits until the LUT is active again. The new process includes clear penalties and helpful portal-side checkpoints to avoid missteps.
• Export Invoices: The generated ARN (Acknowledgement Reference Number) from LUT filing must be mentioned on export or SEZ invoices. This digit-linked benefit supports zero-rating and ensures legal compliance.
• Digital-First, User-Centric Experience: The refreshed GST interface lowers common bottlenecks, such as document upload issues, incorrect financial year selection, or missing partners' details. With portal validations and previews, mistakes become easier to avoid.

Step-by-Step Procedure to File LUT for FY 2025–26

Let us discuss the step-by-step procedure to file LUT for FY 2025-26:

Step 1: Log in to the GST Portal

Visit the official GST site, enter your GSTIN and password, and authenticate with OTP if prompted.

Step 2: Go to the LUT Section

Click the “Services” tab and then go to the “User Services” section. After that, click on the “Furnish a Letter of Undertaking (LUT)” to access the filing form.

Step 3: Choose the Financial Year

Select FY 2025–26 from the dropdown menu before proceeding with the application.

Step 4: Upload Previous LUT (if Available)

If you filed an LUT in earlier years, you can reuse it by uploading the previous PDF file

Step 5: Fill in RFD 11 Form Details

Complete details like the exporter name, GSTIN, address, and financial year. Tick all necessary declarations, and provide information about two independent witnesses.

Step 6: Preview and Review

Verify every detail carefully using the preview function—once submitted, changes cannot be made.

Step 7: Sign and Submit

• For companies/LLPs: Sign using Digital Signature Certificate (DSC)
• For individuals/proprietorships: Use Electronic Verification Code (EVC)

After signing, click Sign and File, and you will receive an ARN (Application Reference Number)

Step 8: Download Acknowledgement

Once it is accepted, download the LUT receipt with ARN. You can view past LUTs any time via the “Services” and then clicking on the “User Services” to “View My Submitted LUTs”.

Documents Required for LUT Filing

Here is the list of documents required for LUR filing:

• GSTIN & Login Credentials: Required to access the GST portal and file the LUT online.

• Previous LUT (if applicable): PDF of the LUT filed for the previous financial year (optional but helpful for reference or uploading).
• PAN Card of the Authorised Signatory: Mandatory for verification and Digital Signature Certificate (DSC) application.
• Digital Signature Certificate (DSC) or Electronic Verification Code (EVC): DSC is required for companies/LLPs; EVC (linked to Aadhaar) can be used by proprietors or individuals.
• Address Proof of the Business: Latest electricity bill, rent agreement, or property tax receipt (optional, but recommended for KYC match).
• Details of Two Witnesses: Name, address, and occupation of two independent witnesses (to be entered in the LUT form).
• Authorisation Letter/Board Resolution (if applicable): For companies or LLPs, authorising the signatory to file the LUT on behalf of the entity.
• Export Invoices (optional): Used for reference, not mandatory during LUT filing, but may be helpful for clarification.

Benefits of Filing LUT in FY 2025–26

The following details include the benefits of filing LUT in FY 2025-26:

• Zero-Rated Exports—No IGST Upfront

Filing LUT allows exporters and SEZ suppliers to ship goods or provide services without paying IGST upfront. This keeps more cash in your business and avoids waiting for tax refunds.

• Simplified Export Procedure

LUT streamlines GST compliance. Compared to paying IGST and later claiming a refund or submitting a bond, LUT removes extra forms, bond collateral, and delays.

• Cost & Time Savings

With fewer steps to complete—no IGST outflow, no bond fees, and no refund follow-ups—exporters save both time and money. The online form RFD 11 is simple and quick to file.

• Competitive Edge in Global Markets

Avoiding extra tax charges helps you offer more competitive prices internationally. That edge helps attract buyers and grow export volumes.

• Reduce Legal Risk

LUT brings clarity and legal compliance. Exporters confirm their intent to meet all GST rules and export requirements. This protects against audits, penalties, or misclassification issues.

Common mistakes to avoid when filing LUT

Filing LUT (Letter of Undertaking) incorrectly can disrupt your export process, block your zero-rated benefits, and create legal or financial complications. Avoid these common errors to stay GST-compliant and smooth-running.

1. Wrong Financial Year Selection: Selecting the incorrect year in Form RFD 11 leads to immediate rejection. Always double-check you have chosen FY 2025–26, not the current year, before filing. Small mistakes here can cost time and cause delays.
2. Missing Important Declarations or Witness Details: Form RFD 11 requires ticking mandatory declarations and entering two independent witness details (name, address, occupation). Missing these elements will reject your LUT. Ensure this section is fully completed.
3. Mismatched Business Details: GSTIN, legal name, or business address must match exactly with your GST registration details. Any mismatch can cause rejection or delays. Always verify every field against your GST portal records.
4. Uploading Incorrect or Mismatched Documents: Sometimes users upload mismatched or outdated documents—for example, outdated LUT copies or incorrect PAN or GSTIN proofs. This leads to errors. Always upload the latest approved LUT copy or none, and ensure format and OCR clarity.
5. Technical Issues with DSC or EVC: Exporters using Digital Signature Certificate (DSC) may face expired certificates or browser compatibility problems. Individuals using Electronic Verification Code (EVC) might enter the wrong OTP or use an email instead of a mobile-linked EVC. Test your digital modes before filing to avoid glitches.
6. Late Filing or Deadline Misses: LUT must be submitted before exporting any goods/services and ideally before March 31, 2025, for FY 2025–26. Delays lead to IGST being paid instead of a zero-rated supply, plus interest or penalties. Stay alert to deadlines to avoid costly mistakes.
7. Exporting Without Valid LUT: Some exporters begin shipping before LUT approval or by mistake assume prior LUT still applies. Without a valid LUT, IGST must be paid upfront, which ties up cash and triggers interest and refund delays.
8. Not Citing LUT ARN on Invoices: Once submitted, your LUT ARN must appear on each export or SEZ invoice to claim zero-rated supply benefits. Leaving it out risks rejecting export invoices for refunds or cause audits.
9. Ignoring Post-Filing Conditions: LUT grants zero-rating, but exports must happen within allowed timelines (typically 3 months for goods, 1 year for services). Failure to meet these timelines triggers IGST with interest as per the IGST Act.

LUT Filing Deadline and Renewal Tips

Filing or renewing the Letter of Undertaking (LUT) is essential for exporters and SEZ suppliers to continue claiming zero-rated benefits under GST. Here is what you need to know:

Filing Deadline: March 31, 2025

The GST portal’s RFD 11 form for FY 2025–26 is active, and filing must be completed on or before March 31, 2025, or before starting any export or SEZ supply, whichever comes first. Missing this deadline means paying IGST upfront and waiting for refunds.

Why Timely Filing Matters?

• Ensures zero-rated exports with no upfront IGST.
• Helps maintain healthy cash flow.
• Avoids delays in export operations and bond requirements
• Reduces paperwork and administrative hurdles

Annual Renewal Is Essential

LUT is valid for one financial year. Filing within the deadline ensures uninterrupted benefits for the entire year (April–March). Always renew annually before March 31 to avoid problems

Renewal Tips for Smooth Filing

• Check portal notifications: When Form RFD 11 is live, act early.
• Connect your DSC/EVC early: Avoid last-minute technical issues.
• Select the correct financial year: Filing for FY 2025–26 is crucial.
• Have prior LUT ready: You can upload last year’s LUT in the portal.
• Ensure accurate details: Match GSTIN, legal name, and address exactly.
• Include witness details: Provide names, addresses, and occupations of two independent witnesses.
• Preview before submission: Mistakes can’t be corrected post-filing.
• Use DSC/EVC properly: Choose based on your registration type—DSC for companies/LLPs or EVC for proprietors/individuals.
• Download ARN receipt: This is proof of filing for your records.

Filing your LUT for FY 2025–26 is more than a compliance task, as it is a smart move that protects cash flow, speeds up exports, and eliminates tax hurdles. With GST portal upgrades and user-friendly features, staying GST-compliant has never been easier. File early, follow the steps, and keep your exports tax-free, seamless, and stress-free. In this article, you have learned about the latest LUT features in FY 2025-26. To get assistance and support in filing a GST registration and GST LUT filing from professional experts, contact Online Legal India.