Description: Learn how LUT registration lets freelancers export services at 0% GST, who qualifies, common mistakes, and the exact filing process.

A freelancer billing a US or UK client often assumes GST simply doesn’t apply, since the client isn’t in India. That’s mostly true, but only if the transaction is structured and reported correctly. Get this wrong, and 18% GST shows up on income you thought was tax-free.

Who Actually Qualifies as an Exporter

Before anything else, it’s worth confirming you’re genuinely exporting a service, not just billing someone abroad. A freelancer writing code for a startup in San Francisco, designing brand assets for a London agency, or consulting for a client in Dubai typically qualifies, provided the service is delivered directly to that foreign client rather than routed through or on behalf of someone else.

Why “0% GST” Isn’t a Loophole — It’s a Legal Mechanism

Export of services from India is a zero-rated supply under Section 16 of the IGST Act, 2017. This means the effective GST rate is genuinely 0%, not a workaround or grey area, provided all five conditions under Section 2(6) of the IGST Act are met simultaneously:

• The supplier is located in India
• The recipient is located outside India
• The place of supply is outside India
• Payment is received in convertible foreign exchange
• The supplier and recipient are not merely establishments of the same entity

If even one of these fails, the zero-rating doesn’t apply, and the invoice becomes a regular taxable supply.

LUT vs Paying IGST and Claiming a Refund

Even with a genuine export, GST law gives you two paths to reach the same 0% outcome:

• Pay 18% IGST upfront on every export invoice, then file Form RFD-01 to claim it back — a refund process that can take months and blocks your working capital in the meantime
• File an LUT (Letter of Undertaking) and invoice directly at 0% IGST, skipping the refund cycle entirely

For most freelancers, the LUT route is the obvious choice. There’s no cash flow gap to manage, and no refund paperwork trailing every invoice.

Common Mistakes That Cost Freelancers the Zero Rating

A few recurring errors turn a clean export into a compliance problem:

• Getting classified as an intermediary. If you’re arranging or facilitating a supply between two other parties, rather than directly providing the service yourself, the place of supply shifts to India under Section 2(13) of the IGST Act, and the transaction becomes fully taxable at 18%, with no zero-rated benefit at all. CBIC has flagged closer scrutiny of this exact classification for digital, consulting, and freelance services in 2026.
• Forgetting annual renewal. An LUT is valid for one financial year only, from 1 April to 31 March. It does not auto-renew, and if you miss filing before the new year starts, invoices raised without a valid LUT lose the zero-rated benefit until you file again.
• Missing foreign remittance documentation. Every settlement needs a Foreign Inward Remittance Certificate (FIRC) from your bank as proof the payment was genuinely received in foreign exchange. Without it, your zero-rated claim has no supporting evidence if questioned.

What You Need and How to File

Filing an LUT requires:

• An active GST registration (mandatory for exporters regardless of turnover, since exports count as inter-state supply)
• DSC for companies/LLPs, or EVC (OTP-based) for proprietorships
• Details of your foreign client relationship, to confirm the export nature of the supply
• Two independent witness details (name, address, occupation)

The process itself is straightforward:

1. Log in to the GST portal with your GSTIN
2. Go to Services → User Services → Furnish Letter of Undertaking (LUT)
3. Select the financial year you’re filing for
4. Fill Form GST RFD-11, ticking the self-declaration boxes
5. Enter witness details and authorized signatory information
6. Sign with DSC or EVC and submit

You’ll receive an Application Reference Number immediately, with no waiting period for approval in most cases.

What You’re Promising When You File

Filing an LUT is a set of undertakings, not just a formality:

• You’ll realise export proceeds within 1 year of the invoice date for services
• You’ll abide by GST laws throughout the year
• You’ll pay IGST plus 18% interest if these conditions aren’t met

Post-Filing Compliance Checklist

Keeping your zero-rated status intact through the year means staying on top of a few recurring steps:

• Every export invoice states “Export of services under LUT without payment of IGST,” ideally referencing your LUT ARN
• GSTR-1 reports these exports in Table 6A each month
• GSTR-3B reports the zero-rated supply in Table 3.1(b)
• Input Tax Credit on business expenses, like software subscriptions or co-working space, stays claimable even though your output tax is nil
• FIRC is collected and filed for every foreign payment received

For the wider picture of how GST, TDS, and advance tax fit together as a freelancer, see our guide on managing freelancer taxes.

Given how much rides on correctly classifying your service and renewing the LUT on time, it’s worth having a CA review your first few export invoices to confirm you’re structured correctly. Tax Vic’s LUT Filing and Export of Services Compliance services help freelancers set this up right from the first invoice.

Key Takeaways

Zero-rated GST on export services is real and legal, not a trick, but it depends entirely on meeting the five export conditions, avoiding intermediary classification, and keeping your LUT renewed and documented every year. Before you file your next LUT or raise your next invoice to a foreign client, take a moment to verify your eligibility properly, ideally with a CA, rather than assuming the zero rating applies automatically.

Need help with this? If you’d like a CA to confirm your export classification and file your LUT correctly, book a 15 min free consultation with Tax Vic.

Live URL: https://blog.taxvic.com/lut-registration-freelancers-gst-guide/

Author: CA Reetu Bhandari

Published: 6 August 2023

Last Reviewed: 6 July 2026

Disclaimer: This article is intended for general informational purposes only and does not constitute tax or legal advice. Readers are advised to consult a qualified Chartered Accountant before making any tax-related decisions based on this content.