GST refund denied due to non-filing of LUT

When an exporter fails to furnish the Letter of Undertaking (LUT) for export of services, it can indeed create complications. However, there are some options available to address this situation:

1. Repayment and Refund:

   • The exporter can repay the IGST (Integrated Goods and Services Tax) along with interest, as requested by the assessing officer. Afterward, the exporter can reclaim the GST paid by following the refund process.
   • This involves repaying the tax amount and then claiming a refund. It’s essential to maintain proper documentation and comply with the refund procedures.

2. LUT Filing (Letter of Undertaking):

   • While it’s true that the LUT cannot be filed after April of the financial year, the exporter can still consider filing it for subsequent years. The LUT allows exporters to export goods or services without paying IGST upfront.
   • If the exporter can furnish the LUT for the current financial year, it will facilitate smoother export transactions without the need for immediate tax payment.

3. Consult a Tax Professional:

   • It’s advisable for the exporter to consult a tax professional or seek guidance from relevant authorities. They can provide specific advice based on the exporter’s unique circumstances.
   • A tax expert can help navigate the complexities and explore any additional options available under the GST framework.

Remember that timely compliance and accurate documentation are crucial in such cases. While the non-filing of LUT is a procedural lapse, taking corrective steps promptly can help resolve the issue and ensure smoother export operations. 🌐💼

 GST refund denied due to non-filing of LUT is a specific situation, but the door is not fully closed.

When services are exported without a valid LUT and without paying IGST, the export does not qualify as a zero-rated supply under Section 16 of the IGST Act. The department treats it as a taxable domestic supply, which is why the refund is denied.

Your options now:

1. Check for court precedent in your state: Several High Courts have granted refunds even where the LUT was not filed before exports, holding that the intent to export was clear and the procedural lapse should not override the substantive right to zero-rating. Check cases from the Gujarat HC, Bombay HC, and Delhi HC on retrospective LUT applicability.
2. File a representation citing circulars: CBDT Circular No. 8/2017 and subsequent guidance acknowledge that where exports are genuine and documentation is in order, refunds may be granted even with procedural lapses. File a detailed representation with your Jurisdictional GST Officer citing these.
3. Documents to attach: FIRC or BRC (foreign inward remittance), export invoices, proof of service delivery to foreign recipient, bank statements showing foreign currency receipt.
4. For future exports: File the LUT at the start of each financial year on the GST portal under Services, Refunds, Furnish Letter of Undertaking (Form RFD-11). It is free and approved instantly.

This [GST show cause notice response guide](https://taxgarden.in/blog/gst-drc-01-show-cause-notice-reply-drc-06-guide-india-2026) covers the DRC-06 reply process if the department has issued a formal demand notice alongside the refund denial.