Letter of undertaken

This discussion clarifies the use of Letter of Undertaking (LUT) for export sales under GST. An exporter with £14 lakh ITC credit inquired if they could switch from exporting without LUT (zero-rated) to exporting with tax payment to claim input credit, and then revert to LUT. The expert advised that both methods are considered zero-rated supplies, and an exporter can choose to apply tax payment to some exports and LUT to others. The specific option chosen must be stated on the invoice and declared in monthly returns. The exporter can indeed claim their ITC as usual, and LUT acts as a self-declaration to fulfil export requirements without upfront IGST payment.