Exporting services from India is zero rated under GST, but you only get to invoice foreign clients without charging 18% IGST if you have filed a Letter of Undertaking first. The LUT is free, it is filed on the GST portal in about ten minutes, and it usually auto approves within one to two working days. The catch is timing: it must be in place before the invoice date.
This is one of the few pieces of Indian tax admin that is genuinely simple and genuinely free. It is also one people discover three invoices too late.
What the LUT actually does
When you provide services to a client outside India and get paid in foreign currency, that is an export of services. Exports are zero rated, which means GST should not add cost to them.
There are two ways to achieve that. You can charge 18% IGST to your foreign client, pay it, and then claim a refund, which blocks your working capital for months and makes your invoices look strange to overseas clients. Or you can file a Letter of Undertaking, which is a formal promise to the department that you are exporting, and then invoice at zero IGST from the start.
Everyone sane picks the second. The LUT is the paperwork that makes it legal.
Do you even need GST registration?
Worth settling before anything else, because these are separate questions and get muddled constantly.
GST registration is generally required once your turnover crosses the threshold, commonly ₹20 lakh for services. Below that, many freelancers are not required to register at all, in which case the LUT question does not arise yet. If you are earning modest amounts from AI training platforms, you are quite possibly not in GST territory.
The LUT only matters if you are registered. If you are, and you invoice foreign clients, you want one.
How to file it, step by step
- Log in to the GST portal and go to Services, then User Services, then Furnish Letter of Undertaking (LUT).
- Select the financial year the LUT should apply to.
- Fill in the undertaking. The wording is standard and you are not drafting anything.
- Enter two witnesses: full name, complete address and occupation for each. They can be employees, family members or business associates, and they do not need a GSTIN.
- Sign it. Companies and LLPs must use a digital signature certificate. Proprietors and individuals can use EVC through an Aadhaar OTP, which is far less hassle.
- Submit, and note the Application Reference Number you receive.
It typically auto approves within one to two working days, with no officer intervention. The government charges nothing for this. If a website offers to file your LUT for a fee, understand that you are paying purely for someone to fill in a short form you could complete yourself.
The timing rule that catches people
An LUT applies from its filing date onward. It does not work retrospectively. That means it must be in place before you raise the invoice it is meant to cover.
The LUT is filed per financial year. For FY 2026-27, the stated deadline is 31 March 2026, though filing in early April before raising your first invoice of the new year is generally accepted, since the LUT covers from the filing date forward. What does not work is invoicing in April, remembering in September, and expecting the LUT to reach backwards.
The practical habit: file it at the start of every financial year, before your first foreign invoice, and put a reminder in your calendar for the following March.
LUT file karna kitna mushkil hai?
Genuinely not difficult. The form is short, the wording is prescribed, the only slightly annoying part is having two witnesses’ full addresses and occupations to hand. Gather those before you start rather than halfway through.
Budget ten minutes. The hard part of GST is elsewhere.
What happens if you did not file one
If you invoiced foreign clients without an LUT in place, the correct treatment is that IGST was payable on those invoices, with a refund claim to follow. That is recoverable but tedious, and it is exactly the working capital problem the LUT exists to avoid.
This is a good moment for a chartered accountant rather than a blog. Do not attempt to quietly backdate anything.
This is general information, not tax advice. What applies to you depends on your residency status, total income and the nature of your work. Speak to a chartered accountant before you file.
Once the GST side is settled, the other half of the picture is income tax, where the most over recommended provision in Indian freelancing content is Section 44ADA. A lot of online work does not actually qualify for it.
What do you need in front of you before starting the form?
The LUT itself takes about ten minutes. Gathering the details halfway through is what turns it into an afternoon.
| You need | Detail | Note |
|---|---|---|
| GST portal login | Your credentials | You must already be registered for GST |
| Financial year | The year the LUT applies to | It runs per financial year, not indefinitely |
| Witness 1 | Full name, complete address, occupation | No GSTIN required |
| Witness 2 | Full name, complete address, occupation | Can be an employee, family member or associate |
| Signing method | Aadhaar OTP for individuals, DSC for companies and LLPs | EVC via Aadhaar is far less hassle |
The witness requirement surprises people most. They are not guaranteeing anything financially, and they do not need to be in business. You simply need two identifiable adults with addresses, which in practice means asking a family member before you open the form rather than during it.
The three GST questions people run together
Most confusion in this area comes from treating three separate questions as one.
- Do I need to register for GST at all? A threshold question, commonly twenty lakh rupees for services. Many freelancers earning modest amounts are simply not required to register, and for them the LUT does not arise.
- Is my work zero rated? Providing services to a client outside India and being paid in foreign currency is an export of services, which is zero rated.
- How do I get the benefit of that? By filing an LUT before you invoice, so you can charge zero IGST rather than charging 18% and reclaiming it later.
Answering these in order prevents the most common mistake, which is an unregistered freelancer worrying about an LUT they do not yet need, or a registered one invoicing foreign clients without one and creating a refund problem for themselves.
This is general information, not tax advice. What applies to you depends on your residency status, total income and the nature of your work. Speak to a chartered accountant before you file.
Related reading
- How to receive foreign payments in India
- Section 44ADA, and who actually qualifies
- What FIRA and eFIRA are, and why your bank wants them
- PayPal vs Payoneer vs Wise, with the real fee maths
Frequently asked questions
What is an LUT under GST?
A Letter of Undertaking is a declaration that lets you invoice foreign clients at zero IGST for exported services, instead of charging 18% and claiming a refund later.
LUT file karne ka kitna kharcha hai?
Nothing. The GST portal charges no fee. Any service charging you for it is charging for form filling you can do yourself in about ten minutes.
How long does LUT approval take?
It typically auto approves within one to two working days, with no officer intervention. You receive an Application Reference Number on submission.
Do the two witnesses need a GSTIN?
No. Witnesses can be employees, family members or business associates. You need their full name, complete address and occupation only.
Can I file an LUT after I have already invoiced?
An LUT applies from its filing date forward, not retrospectively. Invoices raised before it was in place are treated as if IGST was payable, which is recoverable but tedious.
Do I need GST registration to earn from foreign platforms?
Registration is generally required once turnover crosses the threshold, commonly twenty lakh rupees for services. Below that many freelancers are not required to register, and the LUT question does not yet apply.
What do I need before filing an LUT?
GST portal login, the financial year it applies to, two witnesses with full name, address and occupation, and a signing method. Individuals can use an Aadhaar OTP rather than a digital signature.
Do the LUT witnesses take on any liability?
No. They do not need a GSTIN and are not guaranteeing anything financially. You need two identifiable adults with addresses and occupations, which is why family members are commonly used.
Platform rules and rates change without notice. This page was verified in August 2026 and we recheck it monthly. If you hit something different, tell us in the comments and we will update it.
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