Export of Goods Under GST 2026 – Complete Guide to Zero-Rated Exports, Refunds & Compliance

Step-by-step guide covering zero-rated supply of goods, export with and without payment of IGST, LUT filing, shipping bill process, GST refund claim, documentation, and common errors. Learn how to export goods from India under GST without losing your working capital.

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Quick Summary – Export of Goods Under GST

GST Treatment: Exports are treated as zero-rated supplies under GST. No GST is charged on export invoices.
Governing Law: Section 16 of the IGST Act, 2017, and Section 54 of the CGST Act, 2017 for refunds.
Two Options Available: (1) Export without payment of IGST by filing LUT/Bond, or (2) Export with payment of IGST and claim refund.
Recommended Route: Export without payment of IGST via LUT — this avoids working capital blockage.
Key Documents: Commercial invoice, shipping bill, bill of lading/airway bill, LUT/Bond, e-BRC, and shipping bill with GST invoice details.
Refund Options: Refund of unutilized Input Tax Credit (ITC) or refund of IGST paid on exports.
Filing Portal: GST Portal – www.gst.gov.in and ICEGATE – www.icegate.gov.in.
Government Fee: Nil — no government fee for export documentation or GST refund filing.
Refund Timeline: 90% provisional refund within 7 days; full refund within 60 days from the date of application.
Mandatory For: Every exporter who wants to claim export benefits without paying IGST upfront.

Takeaway: Export of goods under GST is the most tax-efficient transaction in India. Done right, it results in zero tax cost, faster refunds, and improved working capital. Done wrong, it blocks your money for months.

1. Introduction – How GST Applies to Export of Goods

When you export goods from India, GST does not apply the way it does to domestic sales. Exports are classified as zero-rated supplies, meaning the entire supply chain is free from GST — either the tax is not charged at all, or it is charged and then refunded.

This makes Indian exports globally competitive by removing the cascading effect of taxes. However, the compliance process is specific — you must file the right declarations, maintain correct documentation, and claim refunds through the correct channel. A small mistake at the shipping bill stage can delay your refund by months.

India's export framework under GST offers two distinct routes. The first route — export without payment of IGST — is the preferred option for most exporters because it eliminates the entire refund waiting period. The second route — export with payment of IGST and then claim refund — is used by exporters who cannot file an LUT for specific reasons.

This guide covers both routes in detail, along with the complete documentation process, shipping bill filing, GST refund claim, and common pitfalls to avoid.

Takeaway: Export of goods under GST is not just about not charging tax — it is about doing it the right way to protect your cash flow and remain compliant.

2. What is Zero-Rated Supply?

A zero-rated supply is a supply on which the GST rate is zero. This means no tax is charged on the supply, but the supplier can still claim Input Tax Credit (ITC) on the inputs and input services used to make that supply. Zero rating is different from exemption — exempt supplies do not allow ITC, while zero-rated supplies do.

Two Categories of Zero-Rated Supplies

Category	Description
Exports	Supply of goods or services or both made to a place outside India
SEZ Supplies	Supply of goods or services to a Special Economic Zone developer or unit for authorised operations

What Zero Rating Means for an Exporter

✅ No GST on Export Invoice: You do not charge IGST or CGST/SGST on the export invoice.
✅ ITC Remains Available: You can claim ITC on raw materials, packing, freight, and other inputs used for export production.
✅ Refund of Unutilized ITC: If your ITC exceeds your tax liability (which it usually does for pure exporters), you can claim a refund.
✅ Refund of IGST (if paid): If you export with payment of IGST, the entire IGST amount is refunded.

Example – Zero Rating in Action: A manufacturer exports leather bags worth ₹20 lakh. The leather, threads, zippers, and packaging used in manufacturing attract GST of ₹1.8 lakh. Because the export is zero-rated, the manufacturer does not charge GST on the export invoice (₹20 lakh, no tax). The ₹1.8 lakh GST paid on inputs becomes unutilized ITC, which is claimed as a refund.

Takeaway: Zero rating is a privilege, not a burden. It allows you to remain GST-compliant while keeping all your input costs tax-free.

3. Two Routes for Export of Goods Under GST

Every exporter must choose one of two routes for exporting goods. The choice impacts your working capital, refund timeline, and overall compliance burden.

Route 1 – Export Without Payment of IGST (LUT/Bond Route)

Under this route, you export goods without charging or paying IGST. You file a Letter of Undertaking (LUT) in Form GST RFD-11 to declare this intent. This is the preferred route for most exporters.

Tax on Invoice: Nil — no IGST charged
Cash Flow Impact: No upfront tax payment, no blockage
Refund: Only refund of unutilized ITC (via GSTR-1 and RFD-01)
Eligibility: Available to all exporters except those prosecuted for tax evasion above ₹2.5 crore
Documentation: LUT in Form RFD-11

Route 2 – Export With Payment of IGST (Refund Route)

Under this route, you charge IGST on the export invoice, pay it, and then claim a refund. This route is used when LUT filing is not possible.

Tax on Invoice: IGST charged at applicable rate
Cash Flow Impact: Upfront IGST payment blocks working capital until refund is received
Refund: Refund of IGST paid on exports (via shipping bill data + GSTR-3B)
Eligibility: Available to all exporters, including those not eligible for LUT
Documentation: No LUT required, but IGST must be paid before refund claim

Which Route Should You Choose?

Parameter	Route 1 (Without IGST)	Route 2 (With IGST)
LUT Requirement	Mandatory	Not required
Upfront Tax Payment	No	Yes
Working Capital Impact	Zero blockage	Up to 18% of export value blocked
Refund Type	Refund of unutilized ITC	Refund of IGST paid
Refund Timeline	90% within 7 days, full within 60 days	90% within 7 days, full within 60 days
Best For	Most exporters with clean compliance history	Exporters not eligible for LUT

Example – Choosing the Right Route: An exporter with an average monthly export value of ₹50 lakh would block IGST of ₹9 lakh (at 18%) every month if they chose Route 2. At any given time, their working capital would be locked at ₹18–27 lakh. By choosing Route 1 with LUT, they keep this entire amount available for business operations.

Takeaway: Always prefer Route 1 with LUT unless your compliance history prevents it. The working capital benefit is substantial.

4. Documents Required for Export of Goods Under GST

Exporting goods under GST requires a specific set of documents. Missing even one document can delay clearance or block your refund claim.

Primary Export Documents

Commercial Invoice with export declaration and GST invoice details
Packing List with detailed product, quantity, and weight information
Shipping Bill filed on ICEGATE with GST-related declarations
Bill of Lading (sea freight) or Airway Bill (air freight)
Bill of Export (for exports through land customs stations)
Letter of Undertaking (LUT) in Form GST RFD-11 (for Route 1 exports)
Import Export Code (IEC) certificate
GST Registration Certificate
Purchase Order or Sales Contract with the foreign buyer
Bank Realisation Certificate (BRC) or e-BRC after payment receipt

Supporting Documents for Refund Claims

GSTR-1: Monthly/quarterly return with export invoice details
GSTR-3B: Monthly summary return disclosing ITC and tax liability
GSTR-9: Annual return reconciling the year's exports
Shipping Bill Copy: Customs-cleared shipping bill with GST declarations
Bank Certificate: Confirming receipt of export proceeds
Invoice Copy: Export invoices with correct GSTIN and shipping bill number
ITC Register: Detailed records of input tax credit availed and utilised

Note: All export invoices must carry the correct GSTIN, IEC number, export invoice serial number, and the corresponding shipping bill number. Missing these details is the most common reason for refund rejection.

Takeaway: Create a standardized documentation checklist for every shipment. Consistency in documentation is the strongest defence against refund rejections.

5. Step-by-Step Process for Export of Goods Under GST

The complete export process under GST flows through the following stages:

1 File LUT on GST Portal: If exporting without payment of IGST, file Form GST RFD-11 for the current financial year before making the first export.

2 Obtain Export Order: Receive a confirmed purchase order or sales contract from the foreign buyer with agreed terms, quantities, and delivery schedule.

3 Prepare Commercial Invoice: Create the export invoice with correct details including GSTIN, IEC, invoice serial number, description of goods, HS code, quantity, unit price, FOB/CIF value, and export declaration.

4 Pack and Mark Goods: Pack the goods as per buyer specifications and mark with shipping marks, container numbers, and destination details.

5 Book Freight: Arrange sea, air, or road freight with a shipping line, airline, or freight forwarder. Obtain the booking confirmation and container details.

6 File Shipping Bill on ICEGATE: File the shipping bill electronically with correct export details, RoDTEP declaration, and GST invoice references. Provide the LUT number for Route 1 exports.

7 Customs Clearance: Complete customs verification and obtain the "Let Export Order" from the Customs Officer. For RMS-facilitated shipments, the process is faster.

8 Load and Ship: Load the goods onto the vessel, aircraft, or vehicle and obtain the Bill of Lading or Airway Bill from the carrier.

9 File EGM: Ensure the Export General Manifest is filed by the carrier within the prescribed time. This is critical for refund processing.

10 Report in GSTR-1: Report the export invoice in the correct table of GSTR-1 — Table 6A for exports with payment of IGST, or Table 6A/6B for exports without payment.

11 File GSTR-3B: Disclose the export turnover, ITC claimed, and tax liability in the monthly GSTR-3B return.

12 Claim GST Refund: File Form GST RFD-01 on the GST portal for refund of unutilized ITC or IGST paid on exports. Attach all supporting documents.

13 Receive Refund: Provisional refund of 90% is granted within 7 days. Final refund is granted within 60 days from the date of application.

Example – Complete Flow: An exporter receives an order worth ₹15 lakh from a buyer in the UK. They prepare a GST-compliant export invoice, file the shipping bill on ICEGATE with their LUT number, complete customs clearance, ship the goods, and receive the Bill of Lading. The invoice is reported in GSTR-1 and disclosed in GSTR-3B. Since the exporter has unutilized ITC of ₹1.2 lakh, they file RFD-01 for refund. Within 7 days, 90% of the refund (₹1.08 lakh) is provisionally sanctioned. The full refund is processed within 60 days.

Takeaway: The export process is sequential and interdependent. Skipping or delaying any step affects the next one — especially EGM filing, which is the trigger for refund processing.

6. GST Refund Process for Exports

The GST refund is the most important financial event in the export cycle. Understanding the refund mechanism helps you plan your cash flow and avoid delays.

Types of Export Refunds

Refund Type	Applicable When	Where Refund Comes From
Refund of IGST Paid	Export made with payment of IGST (Route 2)	Automated processing based on shipping bill data
Refund of Unutilized ITC	Export made without payment of IGST (Route 1)	Manual processing through RFD-01

Refund Timeline Under GST

⏱️ Provisional Refund: 90% of the claimed refund is sanctioned within 7 days from the date of acknowledgement.
⏱️ Final Refund: Full refund is processed within 60 days from the date of receipt of a complete application.
⏱️ Interest on Delay: If refund is not paid within 60 days, interest at 6% per annum is payable.

Steps to File GST Refund for Exports

1 Reconcile Export Data: Match the shipping bill data on ICEGATE with invoice details in GSTR-1.

2 File GSTR-1 and GSTR-3B: Report all export invoices in GSTR-1 and disclose the export turnover and ITC in GSTR-3B.

3 Login to GST Portal: Access the refund section under Services → Refunds → Application for Refund.

4 Select Refund Type: Choose "Refund of Unutilized ITC" or "Refund of IGST Paid on Exports" as applicable.

5 Fill Form RFD-01: Enter the refund amount, provide bank account details, and upload all supporting documents.

6 Submit Application: Submit with DSC or EVC. An ARN is generated for tracking.

7 Track Status: Monitor the application status on the portal. Respond promptly to any deficiency notices.

Key Documents for Refund Claim

Shipping bill details (from ICEGATE)
Export invoices with GSTIN and shipping bill numbers
Bank Realisation Certificate (e-BRC)
GSTR-1 and GSTR-3B acknowledgement receipts
Statement of invoices (Annexure to RFD-01)
CA/CMA certified statement reconciling ITC availed and utilised

Case Study – Refund Delay: An exporter filed for a refund of ₹8.5 lakh but did not reconcile their shipping bill data with GSTR-1. The GST officer issued a deficiency notice. The exporter took three weeks to respond with reconciled data. As a result, the final refund was processed 78 days after the original application — beyond the 60-day statutory timeline. The exporter claimed interest on the delay, and the department paid an additional ₹4,200 in interest.

Takeaway: Refund processing is time-bound but depends on accurate data. Always reconcile your shipping bill and GST return data before filing the refund claim.

7. Shipping Bill – The Central Document for Export

The shipping bill is the primary document filed with Indian Customs for exporting goods. It contains detailed information about the goods, buyer, value, and tax declarations. For GST purposes, the shipping bill serves as the legal record of export.

Types of Shipping Bills

Type	Purpose
Free Shipping Bill	For normal commercial exports with no incentives
Drawback Shipping Bill	For exports claiming Duty Drawback
RoDTEP Shipping Bill	For exports claiming RoDTEP benefits
DEPB Shipping Bill	Historical — for exports under DEPB scheme
SEZ Shipping Bill	For exports to SEZ units

Key Fields in a GST-Compliant Shipping Bill

IEC Number: Importer Exporter Code of the exporter
GSTIN: GST Identification Number of the exporter
Invoice Number: Commercial invoice serial number
Invoice Date: Date of commercial invoice
ITC(HS) Code: Correct product classification code
FOB Value: Free on Board value in INR and foreign currency
RoDTEP Declaration: "Y" or "N" for each line item
LUT Number: For exports without payment of IGST
Drawback Declaration: "Y" or "N" for Drawback eligibility
AD Code: Authorised Dealer Code of the exporter's bank

Important: The GSTIN and invoice number in the shipping bill must exactly match the details in your GSTR-1. Any mismatch — even a single digit — will cause your refund to be flagged for manual verification.

Takeaway: The shipping bill is your export's legal identity. Treat it with the same care as your GST return — every field matters.

8. Common Export Under GST Errors & Solutions

These are the most common mistakes exporters make during export of goods under GST — and how to avoid them.

Error 1: Forgot to File LUT Export made without an active LUT, forcing the exporter to pay IGST. File LUT for the current financial year before making the first export. File it in March for the next financial year to avoid a gap.

Error 2: Mismatch Between Shipping Bill and GSTR-1 Invoice number, GSTIN, or value mismatch between the shipping bill and the GSTR-1 return. Reconcile shipping bill data with GSTR-1 before filing. Always use the exact invoice number and date as per the commercial invoice.

Error 3: Incorrect GSTIN in Shipping Bill Wrong GSTIN entered in the shipping bill, causing refund rejection. Verify the GSTIN on every shipping bill. The GSTIN must match the one used for filing GSTR-1 and GSTR-3B.

Error 4: EGM Not Filed Refund remains pending because the Export General Manifest was not filed by the carrier. Follow up with the shipping line or airline to ensure EGM is filed immediately after the goods depart. EGM is a mandatory prerequisite for refund processing.

Error 5: Not Reporting Exports in GSTR-1 Export invoices not reported in Table 6A of GSTR-1, breaking the refund chain. Report all exports in the correct table of GSTR-1 — Table 6A for exports with payment of IGST, Table 6A/6B for exports without payment.

Error 6: Wrong ITC Reversal Reversing ITC on zero-rated supplies when the exporter is eligible to claim it. Do not reverse ITC on export-related inputs. Zero-rated supplies allow ITC, unlike exempt supplies. Verify your ITC treatment with a GST expert if unsure.

Error 7: Refund Claim Without Bank Realisation Certificate Refund claim filed without the e-BRC or bank certificate confirming receipt of proceeds. Obtain the e-BRC from your bank after export proceeds are received. Attach it with the refund claim as supporting evidence.

Error 8: Missing Declaration in Shipping Bill Forgot to mark "Y" for RoDTEP or Drawback in the shipping bill. Verify the declarations before submitting the shipping bill. Post-facto changes are possible but slow and not guaranteed.

Error 9: Not Maintaining Documentation Invoices, shipping bills, or BRCs not properly filed or easily accessible during audit. Maintain organized digital and physical records of all exports. Keep them accessible for at least 6 years from the end of the financial year.

Error 10: Filing Refund After 2 Years Refund claim filed beyond the 2-year limitation period from the relevant date. File the refund within 2 years from the date of export or from the date of payment of IGST. Do not delay — the limitation period is absolute.

Takeaway: Most export errors are avoidable with careful documentation and reconciliation. The two most critical actions are filing LUT on time and reconciling shipping bill data with GST returns.

9. Penalties & Risks for Non-Compliance

There is no direct penalty for exporting goods. However, the operational and financial consequences of non-compliance can be severe.

💰 Working Capital Blockage: Missing LUT filing forces you to pay IGST upfront, blocking up to 18% of export value.
⏳ Refund Delays: Data mismatches and missing documents extend refund processing by months.
📉 Competitive Disadvantage: Higher-priced exports due to unrecovered taxes reduce your competitiveness in global markets.
🚫 Loss of Benefits: RoDTEP, Drawback, and other incentives are denied for non-compliant exports.
📩 Show Cause Notices: Repeated non-compliance can trigger departmental scrutiny.
⚠️ Interest on Late Refund Claims: Delayed refund claims beyond the limitation period may be denied entirely.

Case Study: An exporter consistently failed to reconcile their shipping bill and GSTR-1 data for two consecutive quarters. When they filed for a refund of ₹22 lakh, the department flagged discrepancies and withheld the refund for 6 months. The exporter had to hire a consultant, reconcile all historical data, and resubmit the claim — incurring ₹45,000 in professional fees and losing substantial working capital flexibility.

Takeaway: Compliance is not optional. The cost of non-compliance — in delayed refunds, lost benefits, and consultant fees — is far higher than the cost of doing it right from the beginning.

10. Frequently Asked Questions – Export of Goods Under GST

No — export of goods is treated as a zero-rated supply under GST. No GST is charged on export invoices. You can either export without paying IGST (using LUT) or export with payment of IGST and claim a refund.

In a zero-rated supply, no tax is charged but Input Tax Credit (ITC) is allowed. In an exempt supply, no tax is charged and ITC is NOT allowed. Export of goods is zero-rated, not exempt.

Yes, but you must pay IGST on the export invoice and then claim a refund. Filing LUT is recommended to avoid upfront IGST payment and working capital blockage.

90% of the claimed refund is granted provisionally within 7 days. The final refund is processed within 60 days from the date of a complete application. Interest at 6% per annum is payable if the refund exceeds this timeline.

Yes — if you export without payment of IGST under LUT, you can claim a refund of unutilized ITC. The refund is filed in Form GST RFD-01 on the GST portal.

Provisional refund of 90% is typically credited within 7-10 working days of application acknowledgement. Final refund is credited within 60 days, subject to verification.

The refund will be flagged for manual verification, delaying the process by weeks or months. Always reconcile shipping bill data with GSTR-1 before filing the return.

Yes — the Bank Realisation Certificate (e-BRC) is required for refund of unutilized ITC. It confirms that export proceeds have been received in your bank account.

Yes, but GST registration is mandatory if your annual turnover exceeds the threshold limit, if you make inter-state supplies, or if you want to claim input tax credit on exports.

The refund claim must be filed within 2 years from the relevant date — either the date of export or the date of payment of IGST, as applicable.

Yes — supplies to SEZ units or developers for authorised operations are zero-rated. You can supply without payment of IGST by filing LUT, or with payment of IGST and claim refund.

Table 6A reports exports with payment of IGST. Table 6B reports exports without payment of IGST. Both are used for refund processing, but the refund mechanism differs.

A deficiency memo will be issued explaining the reasons. You can respond with additional documentation or file a fresh refund application after correcting the deficiencies.

Yes — RoDTEP and GST refund are separate benefits. RoDTEP refunds embedded state and local taxes, while GST refund covers IGST paid or unutilized ITC. Both can be claimed on the same shipment.

For GST refund issues, contact the GST helpdesk at 1800-103-4786 or raise a grievance on the GST portal. For ICEGATE-related matters, call 1800-3010-1000 or email helpdesk@icegate.gov.in.

11. Related Export Import Compliance Resources

GST for Exporters & Importers Export of Services Under GST Zero-Rated Supplies Under GST GST Refund for Exporters LUT for Export Business GST LUT Filing Guide Shipping Bill Guide GST Exports LUT & Bond Guide RoDTEP Scheme Claim Guide RCMC Certificate Guide IEC Number Registration Exports Under GST GST Return Filing Services Export Import GST Compliances

Disclaimer

The information provided in this guide on Export of Goods Under GST is for general informational and educational purposes only. It does not constitute professional tax, legal, or accounting advice, and should not be relied upon as a substitute for consulting with a qualified Chartered Accountant, tax consultant, or legal professional.

GST laws, rules, notifications, circulars, and procedural guidelines are subject to amendment by the Central Board of Indirect Taxes and Customs (CBIC), the GST Council, and other regulatory authorities from time to time. While every effort has been made to ensure the accuracy and currency of the information presented here, DisyTax makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information contained herein.

Any reliance you place on the information in this guide is strictly at your own risk. DisyTax, its directors, employees, and affiliates shall not be liable for any loss, damage, or expense arising directly or indirectly from the use of or reliance on the information provided. Exporters are strongly advised to verify all facts, figures, rates, deadlines, and procedural requirements with the official GST portal, ICEGATE portal, CBIC notifications, or a qualified professional before taking any action.

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