GST for Exporters in India (2026): Zero-Rated Supply, LUT & Refunds
Exports are zero-rated under GST — you either ship under a LUT without paying IGST and refund your input credit, or pay IGST and claim it back. Here's the complete 2026 guide for exporters.
Part of: The Complete GST Guide for Small Business in India (2026)
Exports out of India are treated as zero-rated supplies under Section 16 of the IGST Act — the goal is that no domestic tax is exported, so exports stay globally competitive. "Zero-rated" is not the same as "exempt": you can still claim the input tax credit on your purchases. This guide explains the two ways to export under GST, how refunds work, and what an exporter must have in place.
Quick answer: exports are zero-rated. Route 1 — export under LUT/bond WITHOUT paying IGST, then refund unutilised ITC. Route 2 — pay IGST on the export, then claim a refund of that IGST.
The two export routes
| Route | How it works | What you claim back |
|---|---|---|
| Under LUT / Bond (no tax) | File a Letter of Undertaking, export without charging IGST | Refund of unutilised input tax credit (ITC) |
| On payment of IGST | Charge IGST on the export invoice and pay it | Refund of the IGST paid (largely automatic via the shipping bill) |
Route 1 (LUT) is the most popular because it does not block working capital in tax. Route 2 suits exporters who have large ITC balances they cannot otherwise use.
The LUT (Letter of Undertaking)
- A LUT lets you export goods or services without paying IGST upfront.
- It is filed online on the GST portal (Form GST RFD-11) and is valid for one financial year — renew it every year.
- Most regular exporters qualify; those who don't must export under a bond with a bank guarantee.
Refunds
- IGST-paid route: the shipping bill itself is treated as the refund application — the refund flows once GSTR-1 and GSTR-3B are filed and the shipping bill/EGM data matches.
- LUT route: file a refund claim (RFD-01) for the unutilised ITC attributable to your exports.
- Mismatches between the invoice, shipping bill and returns are the top reason refunds get stuck — keep them identical.
What every exporter needs
- IEC (Import Export Code) from DGFT — mandatory to export.
- GST registration (GSTIN) and a valid LUT for the year (for the no-tax route).
- Export invoices that match the shipping bill exactly (value, HSN, quantity).
- eBRC (self-certified on the DGFT portal) to close the export cycle and stay eligible for incentives.
General information only, not tax advice. Export GST rules, forms and refund procedures change — verify the current position with the CBIC/DGFT or a professional before acting. Last reviewed: September 2026.
