How to Claim GST Refund on Exports (With & Without LUT)
Exports are treated as zero-rated supplies under GST, which means exporters should not bear the burden of the tax. They recover it through a refund. There are two ways to do this — export on payment of IGST, or export under a LUT without paying IGST. This guide explains how to claim a GST refund on exports under both routes.
Exports Are Zero-Rated
Under GST, the export of goods or services is a zero-rated supply. The exporter can either pay IGST and claim it back, or export without paying IGST and claim a refund of the accumulated input tax credit. Either way, the tax does not stick to the exporter. For services specifically, see GST on export of services.
Route 1: Export With Payment of IGST
Here, the exporter pays IGST on the export and then claims a refund of that IGST.
- For goods, the shipping bill itself acts as the refund application. The refund is processed largely automatically once GSTR-1 and GSTR-3B are filed and the data matches customs (ICEGATE).
- For services, the exporter files RFD-01 with proof of realisation (FIRC/BRC).
This route is simple for goods exporters because the system pushes the refund based on the shipping bill.
Route 2: Export Under LUT (Without Payment of IGST)
Here, the exporter files a Letter of Undertaking (LUT) and exports without paying IGST. Since input tax credit accumulates (no output tax to set it off against), the exporter claims a refund of the unutilised input tax credit by filing RFD-01. Learn more in our guide to the LUT under GST.
Comparison of the Two Routes
| Aspect | With IGST Payment | Under LUT |
|---|---|---|
| Pay IGST? | Yes, then refunded | No |
| Refund of | IGST paid | Unutilised ITC |
| Application (goods) | Shipping bill | RFD-01 |
| Cash flow | Blocked until refund | Better — no IGST outflow |
Documents Required
- Export invoices and shipping bills (goods) or invoices and FIRC/BRC (services).
- LUT, if exporting without IGST.
- Statement of refund computation.
- Filed GSTR-1 and GSTR-3B for the period.
Which Route Should You Choose?
The LUT route is usually better for cash flow, because you do not block working capital paying IGST upfront. The IGST-payment route is convenient for goods exporters who prefer the largely automatic, shipping-bill-based refund. Many exporters use the LUT route as standard. For the overall mechanics, see the GST refund process.
Frequently Asked Questions
Are exports taxable under GST?
Exports are zero-rated — effectively tax-free, with the input tax recovered as a refund.
Do I need to file RFD-01 for goods exports with IGST?
No — the shipping bill acts as the refund application; for services, RFD-01 is filed.
What is the benefit of the LUT route?
You do not pay IGST upfront, which protects working capital.
What proof is needed for export of services?
Proof of foreign exchange realisation, such as FIRC or BRC.
Maximise Your Export Refunds
S. Choudhary & Co. manages LUT filing, refund claims, and follow-up for exporters. Explore our GST services or call +91 90248 28295 · sushil@sushilchoudhary.com.
