LUT under GST

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This query is : Resolved

Mahnatesh (Querist)

19 October 2025 Sir the rule 96A says

(a) fifteen days after the expiry of three months 3[or such further period as may be allowed by the Commissioner,] from the date of issue of the invoice for export, if the goods are not exported out of India;

The rule says if goods are not export when goods exported why LUT is needed
Thanks and Regards

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 October 2025 Rule 96A: Why LUT is Needed
Even when goods are exported, the LUT remains necessary because it creates an obligation to export within the specified period.
If an exporter fails to export within the deadline or violates other LUT conditions, the tax relief is withdrawn, penalties may apply, and the exporter may be required to submit a bond with a bank guarantee in future instead of an LUT.
The LUT is not needed after export solely for past shipments, but it is always required before exporting any goods without IGST payment so long as the exporter wishes to claim zero-rated tax status, as per GST law.
If goods are not exported within three months of invoice (or any extension by the Commissioner), IGST and interest must be paid.
If export occurs late (beyond three months), the Commissioner can allow an extension based on circumstances, preserving the benefit if appropriately justified.
LUT is not about the physical act of export alone; it is a legal mechanism that lets exporters enjoy zero-rated tax without delay—but only if they comply with strict timelines and conditions that protect government revenue in case export does not actually happen.

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