LUT for freelancers: bill foreign clients without charging GST
Export of services is zero-rated under GST — but only if you do one of two things: pay IGST and claim it back later, or file a Letter of Undertaking (LUT) once a year and skip the tax entirely. Nearly everyone sane picks the LUT. It's free, filed online, and takes about ten minutes. Here's the whole thing.
Do you even need an LUT?
- You have a GSTIN and bill clients outside India → yes, file an LUT. Without it, you must charge yourself 18% IGST on every export invoice and then chase a refund.
- You have no GST registration (turnover under ₹20 lakh and you've chosen not to register) → you can't file an LUT, and you don't charge GST anyway. Your invoices are simply without GST — see invoicing without GST. Many exporters register voluntarily to claim input-credit refunds; that's a CA conversation.
- Your clients are all in India → an LUT does nothing for you; it applies only to zero-rated supplies (exports and SEZ supplies).
Filing Form RFD-11 — the exact steps
- Log in at gst.gov.in with your GSTIN credentials.
- Go to Services → User Services → Furnish Letter of Undertaking (LUT).
- Pick the financial year you're filing for (file each new FY — April is LUT-renewal month).
- If you had an LUT last year, attach it where asked (PDF of the previous acknowledgement).
- Tick the three self-declarations — you undertake to complete the export within the prescribed period, follow GST law, and pay IGST with interest if you fail to.
- Add two witnesses (name, occupation, address — colleagues or family are fine).
- Sign with DSC or EVC (EVC = OTP on your registered mobile/email — what most individuals use).
- Submit. You get an ARN instantly — that acknowledgement number is your LUT reference.
No officer approval, no fee, no paper. The ARN generated on submission is what goes on your invoices.
What goes on your invoices afterwards
Every export invoice under LUT must carry the declaration:
Plus your LUT ARN and its financial year, the place of supply (the client's country), the SAC code for your service, and — for your own reconciliation — an INR reference value. Our free export invoice generator includes all of it, along with your SWIFT details and purpose code, and the document never leaves your browser.
Validity, renewal and the paper trail
- An LUT is valid for one financial year. Re-file every April — it's the same ten-minute process.
- Report export invoices in GSTR-1's exports table (6A) as zero-rated supplies under LUT.
- Keep three things per payment: the invoice, the FIRA/e-FIRC from your bank (proof the money arrived in foreign currency), and the LUT acknowledgement. Together they establish a clean export-of-services claim.
- Realisation matters: payment for services should arrive in convertible foreign exchange (or INR where RBI permits) within the prescribed period — one more reason invoices with proper SWIFT details get paid without drama.
FAQ
Is there any fee or turnover requirement for an LUT?
No fee. Any GST-registered exporter can file one, unless they've been prosecuted for tax evasion above ₹2.5 crore — an exclusion that doesn't apply to ordinary freelancers.
I forgot to file my LUT in April. Are my earlier invoices in trouble?
File it now — it covers you from filing onwards. For the gap period, the strict position is IGST-with-refund on those invoices; in practice this is exactly the situation to take to your CA rather than guess.
Do I charge 0% GST or no GST on an LUT invoice?
The supply is zero-rated: you show IGST as zero with the LUT declaration on the invoice. That's different from an exempt or non-GST invoice — zero-rating is what preserves your right to claim input tax credit refunds.
Does the LUT change my income tax?
No. The LUT is purely a GST mechanism. Your income tax works exactly as before — the export income is taxable income in your hands like any other professional receipt.
Client pays me in INR through Wise/Payoneer — does the export still count?
Generally yes when the platform settles through proper banking channels and issues a remittance advice showing foreign-currency origin — the FIRA is your evidence. Keep it for every payment, and confirm your platform issues one.