GST Filing for Exporters: How TaxBuddy Manages LUT Filing and Zero-Rated Supplies
- PRITI SIRDESHMUKH
- Jan 15
- 9 min read
Updated: Jan 20
GST filing for exporters in India follows a distinct framework that allows exports to remain tax-neutral through zero-rated supplies. Instead of paying IGST upfront, exporters can use a Letter of Undertaking to ship goods or services without blocking working capital. This mechanism, governed by the CGST Act and IGST Act, requires timely LUT filing, accurate GST returns, and proper documentation. With annual LUT renewal becoming critical for FY 2025-26, managing compliance manually increases the risk of errors and delays. Platforms like TaxBuddy bring structure and automation to exporter GST compliance, ensuring smoother filings and uninterrupted export operations.
Table of Contents
Understanding GST Filing for Exporters in India
GST treats exports differently from domestic supplies to keep Indian goods and services competitive in global markets. Under the GST framework, exporters are allowed to supply goods or services without bearing the burden of output tax, provided procedural conditions are met. This relief is delivered through the concept of zero-rated supplies, supported by timely filings, accurate disclosures in returns, and adherence to export timelines. Exporters must ensure GST registration, correct classification of export transactions, and proper reporting across GSTR-1 and GSTR-3B to remain compliant and avoid cash-flow disruptions.
What Are Zero-Rated Supplies Under GST
Zero-rated supplies refer to exports of goods or services where the GST rate is effectively zero, but input tax credit remains fully available. This means no GST is charged on the outward supply, while taxes paid on inputs can be claimed as refunds. Exports qualify as zero-rated under Section 16 of the IGST Act, making them distinct from exempt supplies. The benefit applies to both physical exports and services rendered to foreign clients, subject to conditions such as receipt of foreign currency and completion of exports within prescribed timelines.
Is LUT Mandatory for Zero-Rated Supplies
A Letter of Undertaking is required when an exporter chooses to supply goods or services without payment of IGST. LUT acts as a declaration to the tax authorities that export conditions will be met within the allowed time. While zero-rated supplies are permitted under law, LUT becomes mandatory to avoid upfront IGST payment. If LUT is not furnished, exports must be made with IGST payment, followed by a refund claim, which often leads to delays and working capital blockage.
LUT Filing Process for Exporters
LUT is filed electronically using Form GST RFD-11 on the GST portal. The filing must be completed before initiating exports and remains valid for one financial year starting April 1. The process involves selecting the relevant financial year, submitting a self-declaration, and verifying the application through DSC or EVC. Once approved, the LUT reference number must be mentioned on export invoices. Annual renewal is essential to continue exporting without IGST payment.
Documents and Compliance Required for LUT Filing
LUT filing does not require extensive documentation at the initial stage, but exporters must maintain accurate records. Basic details such as PAN, IEC, bank account information, and authorised signatory credentials are required during filing. Post-export, records like export invoices, shipping bills, foreign inward remittance certificates, and GST returns must be preserved. These documents support compliance checks and audits and are crucial if refund claims arise later.
Reporting Zero-Rated Supplies in GSTR-1 and GSTR-3B
Zero-rated exports must be reported correctly in GST returns despite being tax-free. In GSTR-1, export details are disclosed in export-specific tables based on whether goods or services are supplied. Corresponding values must align with figures reported in GSTR-3B under zero-rated outward supplies. Any mismatch between returns can trigger scrutiny or delay refunds, making accuracy and consistency essential.
What Happens If the LUT Is Not Filed or Expires
If LUT is not filed or lapses due to non-renewal, exports cannot be made without paying IGST. In such cases, exporters are required to pay IGST at the time of supply and later apply for a refund. This process increases compliance burden and temporarily locks funds. Delays in refund processing can affect liquidity, especially for businesses with frequent export transactions.
GST Refund Process When LUT Is Not Used
When exports are made with IGST payment, refunds are claimed using Form GST RFD-01. The claim must be filed within the prescribed time limit, supported by shipping bills, invoices, and remittance proofs. Refund processing generally involves verification by tax authorities and may take several weeks. Any mismatch in data or documentation can lead to objections, further extending timelines.
Key GST Deadlines for Exporters for FY 2025-26
For FY 2025-26, LUT renewal must be completed by March 31 to ensure uninterrupted exports from April onward. Monthly GSTR-1 filings are due by the 11th of the following month, while GSTR-3B follows its own schedule based on taxpayer category. Exporters must also track reporting timelines for returns covering export disclosures to avoid late fees and compliance risks.
How TaxBuddy Simplifies GST Filing for Exporters
GST compliance for exporters involves multiple moving parts, from timely LUT filing to accurate return disclosures and refund follow-ups. TaxBuddy brings these elements together on a single platform, reducing the dependence on manual tracking and repetitive data entry. LUT filing and annual renewal are automated through guided workflows that ensure the correct financial year is selected, and submissions are completed before deadlines, helping exporters avoid accidental lapses.
The platform validates export data across GSTR-1 and GSTR-3B to identify mismatches early, which lowers the risk of notices or refund delays. Export invoices, zero-rated supply details, and return values are cross-checked to maintain consistency across filings. This integrated approach reduces common errors that arise when data is managed across multiple spreadsheets or portals.
TaxBuddy also supports exporters who need to claim refunds by guiding them through the refund application process and highlighting documentation requirements. Status tracking provides visibility into where each filing or claim stands, removing uncertainty around approvals and processing timelines. Built-in reminders and real-time alerts help exporters stay aware of upcoming deadlines and compliance actions without constant manual monitoring.
Access through the mobile app adds flexibility, allowing exporters to review filings, track LUT validity, and receive updates on the go. This structured and automated system enables exporters to focus on business operations while maintaining steady compliance with GST requirements amid ongoing regulatory updates.
Common GST Compliance Mistakes Exporters Should Avoid
GST compliance for exporters involves multiple touchpoints, and small oversights can quickly turn into costly issues. One of the most frequent mistakes is missing the annual LUT renewal deadline. Since LUT is valid only for one financial year, failure to renew it before March 31 forces exporters to pay IGST on exports until a fresh LUT is filed. This leads to avoidable cash outflows and additional refund procedures that could have been prevented with timely renewal.
Another common issue arises from the incorrect reporting of export invoices in GST returns. Export details must be reported accurately in GSTR-1 under the correct export tables, and these figures must align with the values disclosed in GSTR-3B. Even minor inconsistencies in invoice numbers, taxable values, or shipping bill details can trigger system mismatches, leading to notices or delays in refund processing.
Mismatch between GSTR-1 and GSTR-3B is a recurring compliance risk for exporters. Since GST systems rely heavily on data matching, discrepancies between outward supply details and summary returns often result in scrutiny. These mismatches may arise due to manual data entry errors, delayed invoice uploads, or incorrect classification of zero-rated supplies. Regular reconciliation helps detect and correct such issues early.
Incomplete or improper documentation is another area where exporters face challenges. Refund claims and audits require supporting records such as export invoices, shipping bills, foreign remittance proofs, and return acknowledgements. Missing or inconsistent documents can lead to refund rejections or prolonged verification cycles, affecting liquidity.
Some exporters also overlook foreign remittance timelines, especially in the case of service exports. Delays in receiving payments within the prescribed period can result in loss of zero-rated benefits and potential tax liabilities. Without proper tracking, this risk often goes unnoticed until compliance reviews or assessments.
Lastly, reliance on manual processes increases the likelihood of errors across tax filings, deadlines, and documentation. Without structured compliance checks and periodic reviews, exporters may unintentionally accumulate errors that surface later as notices or refund delays. A disciplined compliance approach, supported by timely monitoring and accurate reporting, plays a crucial role in avoiding these pitfalls and maintaining smooth export operations.
Conclusion
GST filing for exporters relies on disciplined compliance, timely LUT filing, and accurate return reporting to maintain smooth export operations. Zero-rated supplies offer significant relief, but only when procedural requirements are followed consistently. Digital platforms now play a critical role in reducing complexity and improving accuracy. For businesses seeking structured support in managing export-related GST compliance, downloading the TaxBuddy mobile app offers a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers both self-filing and expert-assisted plans to suit different compliance needs. The self-filing option is designed for users who are comfortable entering details on their own and prefer an AI-supported system that checks data consistency and basic compliance. The expert-assisted plan is suitable for cases involving exports, foreign income, refunds, or complex disclosures, where a tax professional reviews filings, resolves mismatches, and ensures regulatory accuracy.
Q2. Which is the best site to file ITR?
The official Income Tax Department portal is the primary and legally recognised platform for filing income tax returns in India. However, assisted platforms like TaxBuddy enhance the filing experience by offering guided workflows, automated data checks, and expert validation. This combination helps reduce errors, especially for taxpayers with multiple income sources or compliance-linked activities such as exports.
Q3. Where to file an income tax return?
Income tax returns can be filed directly on the Income Tax Department’s e-filing portal. Alternatively, authorised platforms such as TaxBuddy allow returns to be filed through a structured interface that integrates data validation, reminders, and post-filing support, making the process easier for individuals and businesses.
Q4. Can newly registered exporters file LUT under GST?
Yes, newly registered exporters are eligible to file a Letter of Undertaking under GST. There is no requirement for prior export history. As long as the exporter meets the basic GST registration criteria and has not been prosecuted for serious tax offences, an LUT can be filed to enable exports without payment of IGST.
Q5. Is LUT required for the export of services under GST?
Yes, LUT is required for exporters of services who wish to supply services without paying IGST. Service exporters must also meet additional conditions, such as receiving payment in convertible foreign exchange and completing the transaction within prescribed timelines, to retain zero-rated benefits.
Q6. How long is LUT valid once approved?
An approved LUT is valid for one financial year, starting from April 1 and ending on March 31. Exporters must renew the LUT every year to continue exporting without payment of IGST. Failure to renew on time results in mandatory IGST payment on exports until a fresh LUT is filed.
Q7. What happens if export proceeds are not realized within the allowed time?
If export proceeds are not realised within the prescribed period, the exporter may lose the benefit of exporting under LUT. In such cases, tax authorities may require payment of IGST along with applicable interest. Proper tracking of foreign remittance timelines is essential to avoid compliance issues.
Q8. Are zero-rated supplies exempt from GST compliance and reporting?
No, zero-rated supplies are not exempt from compliance. Even though no GST is payable, exporters must report zero-rated supplies accurately in GSTR-1 and GSTR-3B. Incorrect or missing disclosures can lead to notices, refund delays, or rejection of benefits.
Q9. How long does a GST refund usually take for exporters?
GST refunds for exporters typically take between 30 to 60 days, provided all filings are accurate and documentation is complete. Delays often occur due to mismatches in returns, missing supporting documents, or additional verification requirements raised by tax authorities.
Q10. Can LUT details be corrected after submission?
Minor errors may not require immediate correction, but significant changes usually require filing a fresh LUT. Exporters should ensure accuracy at the time of filing, as incorrect details can create issues during audits or refund processing.
Q11. Does filing LUT remove the need for GST audits or scrutiny?
No, filing LUT does not exempt exporters from GST audits or scrutiny. Export transactions remain subject to verification by tax authorities. Maintaining proper records, consistent return filings, and supporting documents is essential for audit readiness.
Q12. How does TaxBuddy help exporters manage GST compliance throughout the year?
TaxBuddy supports exporters by tracking LUT renewal deadlines, validating export disclosures in GST returns, assisting with refund workflows, and providing real-time compliance alerts. Its mobile app enables continuous monitoring of filings and deadlines, helping exporters stay compliant without manual follow-ups.
