GST Refunds for Exporters: LUT, Refund of ITC and IGST Explained

Exports are zero-rated under GST: Indian tax shouldn't end up as a cost. But getting there needs either a Letter of Undertaking or a refund claim, and the right documents. This guide explains the options.

Option 1: Export Under LUT

An exporter files a Letter of Undertaking in Form RFD-11 online, for each financial year. With a valid LUT, exports are made without charging IGST. The input tax credit that builds up on purchases can then be claimed as a refund.

• No tax paid upfront on exports.
• Refund of unused credit claimed through RFD-01.
• Suits most service exporters and many goods exporters.

Option 2: Export With IGST Paid

The exporter charges and pays IGST on the export, then gets it refunded. For goods, the shipping bill filed with customs is treated as the refund application, and the refund is processed when the shipping bill and GST returns match.

Refund of Unused Credit

The refundable amount is worked out using a formula based on the proportion of zero-rated turnover to total turnover, applied to eligible credit. Credit on some items, like certain capital goods, is treated differently.

Documents

• Export invoices.
• Shipping bills and export general manifest details, for goods.
• Proof of payment in convertible foreign exchange, like FIRCs or bank realisation certificates, for services where required.
• GSTR-1 and GSTR-3B with exports reported correctly.
• A statement of invoices and credit claimed.

Time Limit

Refund claims must generally be filed within two years of the relevant date — for services, broadly linked to when the service was completed or payment received; for goods, to when they left India.

Provisional Refunds

For zero-rated supplies, a large part of the claim can be released provisionally after a complete application, with the rest after verification.

Getting Help

Think Filing files LUTs and refund claims for exporters, with the documentation that keeps refunds moving.