A Letter of Undertaking (LUT) is a document that businesses can submit to the Indian Goods and Services Tax (GST) department to claim an exemption from paying GST on exported goods or services.

Under the GST regime, exporters are eligible for a refund of the tax paid on inputs used to manufacture goods or provide services that are exported. However, to claim this refund, exporters are required to furnish a bond or LUT to the GST authorities. The LUT serves as a legal undertaking by the exporter to fulfill all the export-related obligations and to refund any tax benefits that are wrongly claimed.

The LUT is valid for a period of one year and must be submitted before the commencement of the export of goods or services. It must be submitted in the prescribed format along with the necessary supporting documents. Once accepted by the GST authorities, the LUT allows exporters to make exports without payment of tax and without the need to furnish a bond for each export shipment.

It is important to note that not all exporters are eligible to submit an LUT. The eligibility criteria may vary from time to time and businesses are advised to check the latest guidelines issued by the GST authorities before applying for an LUT.