Verified · 29 Sept 2026
GST on Exports Calculator – LUT vs IGST Refund
Exports are zero-rated. Compare exporting under LUT (and claiming a refund of accumulated ITC) with paying IGST and claiming it back.
✓ Verified against official notifications · 29 Sept 2026 · How we verify →
Recent change: GST 2.0: 4 slabs collapsed to 5% / 18% with 40% de-merit rate (22 Sept 2025)
Total turnover in the state, excluding exempt supplies.
ITC on inputs and input services; excludes capital goods.
Option 1 · Export under LUT
₹5,40,000
Refund of unutilised ITC (Rule 89(4))
Option 2 · Pay IGST
₹10,80,000
Paid upfront, refunded after shipping bill / RFD-01
- Under LUT you pay no IGST on exports; accumulated ITC is refunded in proportion to export turnover.
- Paying IGST (usually from ITC) gets an automatic refund for goods via the shipping bill, but blocks working capital until it arrives.
- File the LUT (RFD-11) online before the start of each financial year.
- Refund claims must be filed within two years of the relevant date.
FY 2026-27 · GST 2.0 slabs (5% / 18% / 40%) from 22 Sept 2025 · interest on net cash only (s.50 proviso, CBIC Circular 26/2022)Verify on gst.gov.in →Share on WhatsApp
For estimation only. This calculator applies the rules as we understand them on 29 Sept 2026. It is not legal or tax advice. Verify with the official notification or consult a Chartered Accountant / labour-law professional before filing or changing payroll.
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Two ways to export without bearing GST
Exports are zero-rated, so the tax on your inputs comes back to you either way. The choice is when, and how much cash is tied up while you wait.
| Under LUT | Paying IGST | |
|---|---|---|
| Tax charged on the export invoice | None | IGST at the applicable rate |
| What you claim back | Accumulated input tax credit (Rule 89(4)) | The IGST paid |
| How to claim, goods | File RFD-01 | Automatic: the shipping bill is the refund claim |
| How to claim, services | File RFD-01 | File RFD-01 |
| Cash impact | Only input tax waits for refund | IGST paid from credit or cash until the refund arrives |
Worked example
An exporter has ₹80 lakh of export turnover and ₹20 lakh of domestic sales in the refund period, and ₹6 lakh of net input tax credit. Under LUT the refund is ₹80 lakh × ₹6 lakh ÷ ₹1 crore = ₹4.8 lakh. The other ₹1.2 lakh of credit stays in the ledger for domestic tax.
Paying 18% IGST on the same exports means ₹14.4 lakh of IGST. Whatever the credit ledger cannot cover is paid in cash, and all of it waits for the refund. For goods that refund is usually quick, because the shipping bill triggers it, which is why some exporters of goods prefer this route. For services, where both routes need an RFD-01, LUT is almost always better.
Getting the LUT right
- File RFD-11 on the portal before the financial year starts. It is approved on filing and valid for the year.
- Quote the LUT reference on every export invoice, with “supply meant for export under LUT without payment of IGST”.
- Service exports must be paid for in convertible foreign exchange, or in rupees where RBI allows it, or they are not exports.
Limits on the refund formula
- For goods, the export turnover in the formula is capped at 1.5 times the value of similar goods sold in India. This stops inflated export prices from inflating the refund.
- Adjusted total turnover leaves out exempt supplies other than exports.
- File the claim within two years of the relevant date, which for goods is the date they leave India.
Official sources
Frequently asked questions
What is an LUT?
A Letter of Undertaking (RFD-11) that lets you export without paying IGST. File it before the financial year starts.
How is the LUT refund calculated?
Refund = turnover of zero-rated supplies × net ITC ÷ adjusted total turnover (Rule 89(4)).
Which option is better?
LUT keeps cash free. Paying IGST from ITC can be faster for goods (auto-refund via the shipping bill) but ties up funds until the refund arrives.