Avoid the trap6 min read· Reviewed 23 June 2026

The LUT trap: file RFD-11 before 31 March, every year

You raise an invoice to your US client, they pay you through Wise or PayPal, and you assume the GST side is handled because exports are zero-rated. Then a month later you find out there was a form you were supposed to file first, and now your beautiful 0% invoice has a problem. This is the LUT trap, and it catches careful freelancers every single year.

Here is the good news up front: the fix is one form, filed once a year, for free, on the GST portal. The bad news is that timing is everything. Miss the window and you are either parking 18% of your income with the government for months, or watching your export get treated as a regular Indian sale. Let's walk through exactly what the LUT is, why it expires, and how to never get caught.

What the LUT actually is

LUT stands for Letter of Undertaking. On the GST portal it is called Form RFD-11. It is governed by Rule 96A. In plain English, it is a promise you make to the tax department: you are telling them that you export services, and that you will follow the export rules. In exchange, they let you invoice your foreign clients at 0% GST without paying IGST upfront.

A quick glossary, because these acronyms pile up fast. IGST is Integrated GST, the tax that would normally apply to inter-state and cross-border supplies. GSTIN is your GST registration number. You need a GSTIN to file an LUT at all. So the order is: register for GST, get your GSTIN, then file the LUT.

The LUT costs nothing to file and is done entirely online on the GST portal. It is one of the rare bits of GST compliance that is genuinely quick once your GSTIN is active.

Why the deadline matters: it expires every 31 March

Here is the part that trips people up. An LUT is valid only for the financial year you file it in. It auto-expires on 31 March. It does not roll over. So the LUT you filed last year is dead the moment the new financial year begins, even if you do not notice.

It must be filed before your first export invoice of the financial year. And it is not retroactive. You cannot file it in June and have it cover an invoice you raised in April. That April invoice was raised without a valid LUT covering it, and no amount of later filing changes that.

This is the trap in one sentence: a valid LUT from last year does NOT cover this year. Every 1 April you start from zero. If you raise your first foreign invoice of the new year before filing the new LUT, that invoice is not protected.

What goes wrong without a valid LUT

If you do not have a valid LUT in place when you invoice a foreign client, you are looking at one of two bad outcomes.

You charge 18% IGST on the invoice and claim a refund later. Your money is locked with the government for months while you chase that refund. For a freelancer living invoice to invoice, that cash crunch hurts.
Your export risks being reclassified as a domestic supply. Instead of a clean zero-rated export, it gets treated like a regular sale inside India, with the tax consequences that come with that.

Neither is where you want to be. Both come from the same root cause: no valid LUT at the moment you raised the invoice.

The April gap, and how to handle an invoice you cannot delay

Say it is early April. A new financial year has started, your old LUT has expired, and a client needs an invoice today. You have not filed the new LUT yet. This is the April gap, and it is the single most common way freelancers fall into the trap.

You have two honest options here. The cleaner one: file the LUT first, then raise the invoice. If you genuinely cannot wait, the invoice must use the "on payment of integrated tax" wording, meaning you treat it as a taxable export and pay the IGST, then deal with the refund route. What you must not do is raise a 0% LUT-style invoice when no valid LUT exists behind it.

Do not paper over the April gap by issuing a 0% invoice as if the LUT were still alive. The LUT that expired on 31 March cannot cover an April invoice. Either file first, or invoice on payment of integrated tax.

The one habit that keeps you safe

The whole problem disappears with one routine. At the very start of each financial year, before you raise a single foreign invoice, log into the GST portal and file Form RFD-11. Make it the first work thing you do in April, ahead of any client invoice. A developer billing a US startup, a designer invoicing a European agency, a writer paid through PayPal, same rule for all of you: GSTIN first, LUT next, invoice last.

You are registered and have an active GSTIN.
You filed Form RFD-11 (the LUT) for the current financial year, before your first export invoice.
You remember it expires on 31 March, so next year you file again.

If you are unsure whether your LUT is current, or whether a specific invoice is covered, do not guess. Run Jeedle's free checker and use the invoice tool to get the wording right, and confirm anything genuinely uncertain with a qualified CA. This guide is plain-English guidance to keep you out of the trap, not personal tax advice for your exact situation.

Frequently asked questions

What is an LUT and Form RFD-11 for freelancers exporting services?

An LUT (Letter of Undertaking) is Form RFD-11, filed on the GST portal and governed by Rule 96A. It lets you invoice foreign clients at 0% without paying IGST upfront. You need an active GSTIN to file it.

When do I have to file the LUT each year?

Before your first export invoice of the financial year. The LUT is valid only for that financial year and auto-expires on 31 March, so you must file a fresh RFD-11 at the start of each new financial year.

Can I file the LUT after I have already raised a foreign invoice?

No, the LUT is not retroactive. It does not cover invoices you raised before filing it. If your LUT was not in place, that invoice is not protected, which is why filing before your first export invoice matters.

What happens if I invoice a foreign client without a valid LUT?

One of two things: you charge 18% IGST and claim a refund later, leaving your cash blocked for months, or your export risks being reclassified as a domestic supply.

What should I do in early April if my old LUT has expired but a client needs an invoice now?

Either file the new LUT first and then invoice, or, if you cannot wait, raise the invoice using the "on payment of integrated tax" wording. Do not issue a 0% LUT-style invoice when no valid LUT exists.

Check if I need GST →Make an export invoicePlain-English guidance, not personal tax advice. GST has grey areas — confirm with a qualified CA before acting.

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