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GST on Export Services in India (LUT, Zero-Rated Supply & Invoice Format)

Exports of goods and services are zero-rated supplies under Indian GST — meaning no GST is charged on export invoices and the exporter can claim a full refund of input taxes. Understanding LUT filing, correct invoice format, and the refund process is critical for exporters to maintain cash flow.

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Export GST: Zero-Rated vs Exempt

Zero-rated does not mean exempt. An exempt supply has no GST and no ITC. A zero-rated supply has no GST on output but the exporter CAN claim ITC on all inputs. This is the critical distinction — exporters effectively get a full tax refund on all GST paid to suppliers. Two options for exporters: (1) File a Letter of Undertaking (LUT) and export without paying IGST, then claim ITC refund. (2) Pay IGST on exports and claim a cash refund. Option 1 (LUT) is preferred as it avoids cash flow blockage.

Export Invoice Requirements

Field Requirement
Tax amount Zero (₹0) — "Zero-Rated Supply"
LUT reference LUT/Bond number must be stated
Currency Can be in USD/EUR — show INR equivalent
Port of loading Required for goods exports
Shipping bill number Required for goods (after shipment)
GSTIN of exporter Mandatory

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FAQs

What is a LUT in GST exports?

Letter of Undertaking (LUT) is a bond filed by exporters with GST authorities allowing export without paying IGST. LUT is filed annually on the GST portal under Form GST RFD-11. Most exporters with clean compliance history are eligible.

How do I claim GST refund on exports?

For LUT exporters: File GSTR-1 with export details, then apply for ITC refund in Form GST RFD-01. For IGST-paid exporters: The refund is auto-processed based on shipping bill and GSTR-3B data.

What GST rate is charged on export invoices?

Zero — exports are zero-rated. The invoice states "Zero-rated supply — LUT No. XXXX" with no tax amount charged.

Can services exported to foreign clients be zero-rated?

Yes, if the service qualifies as export of service: supplier in India, recipient outside India, place of supply outside India, payment in foreign exchange. IT services, consulting, and freelance work to foreign clients all qualify.

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.

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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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