Discover How Foreign Subsidiaries In India Can Leverage A LUT (Letter Of Undertaking)

A Letter of Undertaking (LUT) plays a significant role for all companies in India engaged in the export of services. It is a document filed under the provisions of the Goods and Services Tax (GST) law that allows exporters to supply goods or services without paying Integrated Goods and Services Tax (IGST).

The Purpose:

• The LUT enables companies to export services without the burden of paying IGST upfront.
• It assures the government that the exporter will fulfill all GST compliance requirements.

Lets understand the benifit with an Example of Export of Services Worth $10,000

Scenario 1: With a Letter of Undertaking (LUT)

• Service Export Details:
  • Value of exported services: $10,000 (approx. ₹8,20,000 at an exchange rate of ₹82 per USD).