Export Invoice Under GST (LUT, Format & Zero-Rated Example)
Exports under GST are zero-rated, meaning you do not need to pay GST on export supplies. But zero-rated does not mean zero paperwork. You need to either file a Letter of Undertaking (LUT) or pay IGST and claim a refund. The export invoice has specific mandatory mentions. Here is everything you need to know.
By Arjun Sharma· GST & Tax Compliance Specialist···Reviewed for GST accuracy
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Quick Answer
Exports under GST are zero-rated — you charge 0% GST on the export invoice. You have two options: (1) File a Letter of Undertaking (LUT) before export and issue an invoice without GST — preferred for regular exporters. (2) Charge IGST on the export invoice, pay it, then claim a refund within ~60 days. In both cases, you retain ITC on inputs used for the export. The export invoice must state "Supply meant for export under LUT" or "Supply meant for export on payment of IGST."
Zero-Rated Supply — What It Means for Exports
Under IGST Act Section 16, export of goods and services is a "zero-rated supply." This means: (a) You charge 0% GST on the export, and (b) you can still claim ITC on inputs used for making those exports. This is the key advantage — unlike exempt supplies, zero-rated supplies preserve your ITC chain.
Two Options for Export Under GST
Option
What You Do
Result
LUT (Letter of Undertaking)
File LUT on GST portal before exporting. Issue invoice without GST.
No GST payment. Claim ITC refund for inputs.
Pay IGST and claim refund
Charge IGST on export invoice. Pay to government. Claim refund.
Cash flow impact, but refund available in ~60 days.
Important
For businesses that regularly export, LUT (Option A) is almost always better — no cash flow impact and simpler process.
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LUT must be filed on the GST portal (gst.gov.in) before making exports without IGST. The LUT is valid for a full financial year and must be renewed annually.
Log into gst.gov.in → Services → User Services → Furnish LUT
Select financial year and provide undertaking details
Attach required documents (IEC, bank realisation certificate if applicable)
Submit — ARN is generated immediately
Download the LUT for your records
Mandatory Mentions on Export Invoice Under GST
An export invoice must include all standard GST invoice fields plus:
"Supply meant for export under LUT without payment of integrated tax" (if LUT option)
"Supply meant for export on payment of integrated tax" (if paying IGST)
Name and address of buyer in the export destination country
Delivery address (if different from buyer address)
Currency and exchange rate (for foreign currency invoices)
Export Invoice Number
8-digit HSN code (mandatory for all exports)
Shipping Bill Number (if known at time of invoicing)
Export of Services — Special Rules
Export of services has a separate definition under IGST Act. For a service to qualify as an export: (a) supplier is in India, (b) recipient is outside India, (c) place of supply is outside India, (d) payment received in convertible foreign exchange, (e) supplier and recipient are not establishments of the same person.
Example
An Indian software developer (Bengaluru) invoices a US client ($5,000 for software development). Payment received in USD. This qualifies as export of service. Issue invoice with LUT mention, no GST. Claim ITC refund on laptop, internet, office expenses used for this work.
FAQs
Is LUT mandatory for all exports?
LUT is required if you want to export without paying IGST. If you are okay paying IGST upfront and claiming a refund, you can export without LUT. However, practically, LUT is strongly preferred.
Can I claim ITC on inputs even for zero-rated exports?
Yes. This is the main advantage of zero-rated (vs exempt) status. You can claim full ITC on all inputs used for export supply. The ITC refund process applies.
What if my foreign client pays in INR?
If payment is received in INR (Indian Rupees), the supply may not qualify as "export of services" unless it meets the RBI trade-based netting guidelines. Consult your CA if you receive INR from foreign clients.
Is there GST on freight charges for exports?
Freight charges for export of goods (sea/air freight paid in foreign currency) are zero-rated. Freight charges paid in INR for export consignments may still attract GST depending on the specifics.
Why Businesses Stop Using Excel for GST Invoices
Manual GST calculation mistakes
One wrong CGST/SGST split or a misapplied rate triggers notices and ITC denial for your buyer.
Slow invoice creation
Copying last month's Excel file, updating dates, recalculating — 20 minutes for what should take 30 seconds.
Formatting breaks on every device
Excel invoices look different on every printer and PDF converter. Clients complain about unreadable layouts.
No easy sharing or payment link
Sending PDFs over WhatsApp with no way for clients to pay directly slows down collections.
Incorrect tax type (IGST vs CGST+SGST)
Excel can't auto-detect intra vs inter-state supply. Wrong tax type = ITC rejected for your buyer.
Disclaimer: The information in this article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. GST rules and rates are subject to change. Consult a qualified CA or tax professional before making compliance decisions.
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