Export of Goods Under GST – Complete Guide to LUT, Refund & Compliance

📌 What is Export of Goods Under GST?

Export of goods under GST means taking goods out of India to a place outside India. As per Section 2(5) of the IGST Act, "export of goods" with its grammatical variations and cognate expressions means taking goods out of India to a place outside India. It is treated as a zero‑rated supply under Section 16 of the IGST Act. This means no GST is charged on the exported goods. The exporter can either export under a Letter of Undertaking (LUT) without paying IGST, or pay IGST at the time of export and claim a refund later. For example, if a textile manufacturer in Mumbai exports fabrics to a buyer in Dubai, the sale is zero‑rated. DisyTax has helped over 1,500 goods exporters with GST compliance. Start with our GST basic terms to build a foundation.

📌 Is Export of Goods Taxable Under GST?

No, export of goods is not taxable; it is a zero‑rated supply. As per Section 16 of the IGST Act, zero‑rated supply means a supply of goods where no GST is charged. The exporter does not collect any tax from the foreign buyer. Instead, the exporter is eligible to claim a refund of the input tax credit (ITC) paid on the inputs, input services, and capital goods used to manufacture or procure the exported goods. For instance, if an auto parts exporter in Chennai ships components to Germany, the export invoice will show 0% GST. The exporter can claim a refund of GST paid on steel, machinery, and other expenses.

📌 Export of Goods as Zero Rated Supply

Zero‑rated supply is defined under Section 16(1) of the IGST Act. It includes exports of goods and services. The rate of tax on such supplies is 0%. There are two ways to handle a zero‑rated supply: (a) export under a Letter of Undertaking (LUT) without payment of IGST, or (b) export with payment of IGST and then claim a refund of the IGST paid. The LUT route is the most common because it preserves cash flow. The exporter can also claim a refund of accumulated ITC on inputs used in making the zero‑rated supply.

📌 Conditions for Export of Goods Under GST

For a transaction to qualify as an export of goods under GST, the following conditions must be met:

• Goods must physically leave India: The goods must be taken out of the country to a place outside India. Mere booking of an export order does not qualify.
• Payment must be received in convertible foreign currency: As per Section 2(5), export means taking goods out of India, but for zero‑rating and refund purposes, the RBI's forex regulations require payment in convertible foreign currency (or INR as permitted under special arrangements).
• Supplier and recipient are distinct persons: The exporter and the foreign buyer must not be establishments of the same entity.
• Proper documentation: A valid shipping bill, export invoice, and proof of export (like Bill of Lading) are required.

Example: An Indian handicraft seller ships products to a buyer in the USA. The goods are taken out of India, payment is received in USD, and the buyer is a separate entity – all conditions are satisfied, so it is an export of goods.

📌 GST Registration Requirements for Exporters

Every exporter must obtain GST registration, irrespective of turnover. This is mandatory because:

• To file LUT, you need a valid GSTIN.
• To claim a refund of IGST or ITC, registration is required.
• To issue export invoices with LUT declaration, GSTIN is necessary.
• As per Section 24 of the CGST Act, persons making inter‑state supplies (exports are inter‑state) must register regardless of threshold.

Documents required: PAN, Aadhaar, proof of business address, bank account proof, and IEC (Import Export Code). The IEC must be linked with GSTIN. Our GST registration threshold limit guide explains all details.

📌 LUT (Letter of Undertaking) for Export of Goods

An LUT is a declaration filed on the GST portal that allows exporters to export goods without paying IGST at the time of export. It is governed by Rule 96A of the CGST Rules. The LUT is valid for one financial year and must be filed before the first export. Without LUT, you must pay IGST on every export shipment and claim a refund. The LUT route is the preferred method for most exporters. DisyTax files LUTs for goods exporters within 24 hours. For step‑by‑step filing, see our LUT/Bond guide.

Example: A leather goods exporter in Kanpur files an LUT in April 2026 for FY 2026‑27. All exports during the year are done without IGST payment. The exporter issues invoices with the LUT declaration and reports them in GSTR‑1.

📌 Export Under LUT Without Payment of IGST

Once your LUT is active, you can issue export invoices without any IGST. Each invoice must carry the declaration: "Supply meant for export under LUT without payment of IGST". In the shipping bill, you must mention the LUT ARN and mark the export as "Without payment of IGST". When filing GSTR‑1, you report the export in Table 6A with the LUT option. The GST portal validates the LUT. You do not pay any IGST at the time of export. This preserves your working capital. Later, you can claim a refund of accumulated ITC via Form GST RFD‑01.

📌 Export With Payment of IGST

If you choose not to file LUT, or if your LUT is not approved, you must pay IGST on the export invoice. The IGST rate is the same as the domestic rate for that product (e.g., 18% for most manufactured goods). You charge IGST on the invoice, pay it through your electronic cash ledger, and then claim a refund of the IGST paid. The refund is largely automatic – when the shipping bill data matches with your GSTR‑1, the IGST is refunded to your bank account. This method ties up working capital but is simpler for occasional exporters who may not want to file an LUT. Example: A first‑time exporter of spices pays 5% IGST on an export consignment of ₹10 lakhs (IGST ₹50,000). After the shipping bill is filed and EGM generated, the ₹50,000 is automatically refunded to the exporter's bank account within a few weeks.

📌 GST Refund on Export of Goods

Exporters can claim two types of refunds:

• Refund of IGST paid on export: Automatic based on matching of shipping bill with GSTR‑1. No separate application needed for most cases. However, if the shipping bill details are not transmitted correctly, a manual refund application may be required.
• Refund of accumulated ITC: When exporting under LUT, the ITC on inputs keeps accumulating. You can claim this as a refund by filing Form GST RFD‑01. This is a manual process requiring upload of invoices, shipping bills, and bank details. The time limit is 2 years from the date of export.

DisyTax handles end‑to‑end refund filing. Our GST refund guide explains each step in detail.

📌 Documents Required for GST Refund Claims

For an ITC refund claim on export of goods, you need:

• Copy of export invoices
• Copy of shipping bills (bill of export)
• Proof of receipt of foreign exchange (FIRC/BRC or bank statement)
• GSTR‑2A extract showing ITC available
• Statement of invoices and ITC claimed
• Declaration that the refund claimed has not been claimed earlier

For IGST refund on export, the process is mostly automated; however, you should keep these documents ready for any verification. For detailed document checklist, refer to our refund application guide.

📌 Export Invoice Requirements Under GST

An export invoice must contain:

• Exporter's name, address, and GSTIN
• Buyer's name and foreign address
• Invoice number and date
• Description of goods, HSN code, quantity, and value
• Country of destination
• Shipping bill number and date (can be added later if not available at invoicing)
• Declaration: "Supply meant for export under LUT without payment of IGST" (or "Supply meant for export on payment of IGST" if IGST route)
• Terms of delivery (Incoterms)

Use our GST invoice format for ready templates. The invoice must clearly indicate that it is an export, as this determines zero‑rating.

📌 Shipping Bill Requirements for Exporters

The shipping bill is the most critical document for export under GST. It is filed with Customs at the port of export. Key points:

• The shipping bill must reference your GSTIN and export invoice number.
• If exporting under LUT, the shipping bill must be marked "Without payment of IGST under LUT" and the LUT ARN must be mentioned.
• If exporting with IGST, the shipping bill must show the IGST amount and challan details.
• After export, Customs transmits the shipping bill data to the GST portal. This data is used to validate your refund claim.
• In case of courier exports (through Amazon Global Selling, etc.), a courier bill or simplified shipping bill may be used.

Our shipping bill guide covers the process in detail.

📌 E‑Way Bill Requirements for Export of Goods

For movement of goods intended for export, an e‑way bill is required if the consignment value exceeds ₹50,000. The e‑way bill must be generated before the goods are moved from the place of business to the port/airport/customs station. Key points:

• The e‑way bill should be generated under the "Export" transaction type.
• If the goods are being transported to a port in a different state, IGST may be applicable on the transportation service, but the goods remain zero‑rated.
• The shipping bill number can be updated in the e‑way bill once it is available.
• Failure to generate e‑way bill can lead to detention of goods and penalty of ₹10,000 or tax sought to be evaded, whichever is higher.

Refer to our e‑way bill guide for complete rules.

📌 GST Return Filing for Exporters

Exporters must file regular GST returns:

• GSTR‑1: Report all export invoices in Table 6A. Due 11th of the following month (monthly) or 13th after quarter (QRMP).
• GSTR‑3B: Summary return where export turnover is reported as zero‑rated supply, and ITC is claimed. Due 20th (monthly) or 22nd‑24th (QRMP).
• GSTR‑9: Annual return consolidating all export and domestic data.

Accurate reporting is critical for refund processing. Any mismatch between shipping bill, GSTR‑1, and GSTR‑3B can delay refunds. Our GST return filing guide is a helpful resource.

📌 Reporting Export of Goods in GSTR‑1

In GSTR‑1, you report each export invoice in Table 6A. You must provide:

• Invoice number and date
• Port code and shipping bill number
• Invoice value in foreign currency and INR equivalent
• Taxable value and GST rate (0% for zero‑rated, or applicable IGST rate if paying IGST)
• Whether the export is under LUT or with IGST payment

For goods, the shipping bill number is mandatory. If the shipping bill is not available at the time of filing GSTR‑1, you can report the invoice and amend it later. Proper reporting ensures the IGST refund (if applicable) flows automatically.

📌 Reporting Export Transactions in GSTR‑3B

In GSTR‑3B, the export turnover is reported under Table 3.1(b) as "Zero‑rated supplies". You do not enter any tax liability for exports under LUT. If you paid IGST, the IGST amount is reflected in the liability and then paid through the cash ledger. The ITC claimed in Table 4 must match the available credit in GSTR‑2A. For exporters, GSTR‑3B is a summary and should reconcile with GSTR‑1 data.

📌 Input Tax Credit (ITC) on Export Goods

Exporters can claim ITC on all inputs, input services, and capital goods used in the course of export business. This includes:

• Raw materials and components used to manufacture the exported goods.
• Packaging materials.
• Freight and logistics up to the port of export.
• Capital goods like machinery and equipment used for export production.
• Export‑related services like port charges, customs agent fees, inspection charges.

Since exports are zero‑rated, this ITC cannot be set off against output tax. It accumulates and must be claimed as a refund. Our ITC guide covers all eligibility conditions.

📌 Common GST Mistakes Made by Exporters

📌 GST Compliance Checklist for Exporters

• ✅ Obtain GST registration and IEC before starting exports.
• ✅ File LUT at the beginning of each financial year.
• ✅ Issue export invoices with all mandatory fields and correct declaration.
• ✅ Generate e‑way bill for consignments above ₹50,000 before movement.
• ✅ Ensure shipping bill data matches export invoice and GSTR‑1.
• ✅ Report all export invoices accurately in GSTR‑1 Table 6A.
• ✅ Claim ITC on all eligible inputs and expenses in GSTR‑3B.
• ✅ File refund application (GST RFD‑01) for accumulated ITC, if applicable.
• ✅ Maintain all export documentation for at least 72 months.
• ✅ Reconcile foreign exchange receipts with export invoices.

📌 Frequently Asked Questions (FAQs) on Export of Goods Under GST

📚 Essential GST Resources for Goods Exporters