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Suggestion Required : Export with or without LUT?

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Kunal Vanjare

27 Points Posted on 12 July 2021

Is it recommended to export with LUT or by paying IGST?

I will be exporting my product for the first time. This is manufactured using raw materials sourced from different vendors. If I pay GST to each vendor for the raw material, how do I claim this when I cannot charge GST to my overseas client?

Can I adjust the ITC against my domestic sales? How?

Replies (3)

Quick Summary

This discussion addresses the common query for first-time exporters regarding whether to export goods with a Letter of Undertaking (LUT) or by paying IGST upfront. It clarifies that you won't charge GST to overseas clients. You can either pay GST on exports and claim a refund, or export under LUT and claim a refund of Input Tax Credit (ITC). The conversation also touches upon whether suppliers should bill without GST when exporting under LUT and how ITC can be used for domestic sales.

CA Altamush Zafar

GST Consultant

15986 Points Posted on 12 July 2021

You will not charge GST from your overseas client.

Either you pay GST on exports or export it on LUT.

If you pay GST, the amount will be refunded.

If you export it under LUT then you can claim refund of ITC.

For further query you can mail me.

Kunal Vanjare

27 Points Posted on 12 July 2021

Originally posted by : CA Altamush Zafar
	You will not charge GST from your overseas client. Either you pay GST on exports or export it on LUT. If you pay GST, the amount will be refunded. If you export it under LUT then you can claim refund of ITC. For further query you can mail me.

Yes, but what I am asking is that if I export under LUT, should I be asking my suppliers to bill me without charging me GST? Or do I still have to pay GST for purchases? And can I use this ITC for domestic sales?