Key takeaways
LUT for Export of Services India, a freelancer friendly explainer
If you invoice overseas clients from India, a LUT is the simplest way to keep your exports zero rated, skip upfront IGST, and avoid long refund cycles. In plain terms, a LUT is an annual declaration on the GST portal that says you will follow the rules while exporting without paying tax upfront.
What does zero rated really mean for freelancers
Zero rated supply under GST means exports and supplies to SEZ are taxed at zero, yet you can still claim input tax credit on eligible business expenses. For a freelancer in India serving a client abroad, this is the default treatment when the transaction qualifies as an export of services.
Quick export self check
For deeper reading and examples, see GST for freelancers working with foreign clients, GST on export of software services, LUT in GST guide, and GST on freelancers.
Why the LUT route beats paying IGST and claiming refunds
Two choices exist. Pay IGST on export invoices, then claim a refund, or furnish a LUT and raise zero tax export invoices. Most freelancers prefer the LUT route because it protects cashflow and reduces paperwork.
LUT vs bond, can you apply without a bank guarantee
In almost all normal cases, freelancers can furnish a LUT without a bond, as long as there is no prosecution for major tax offenses. A bond with bank guarantee is needed only if LUT is not permitted in your specific case. For a stepwise explainer, see the Razorpay LUT in GST guide.
If you are not registered under GST because you are below the threshold, you cannot file a LUT and you will not get zero rated export benefits or refunds. Registration comes first.
Documents and data you need to file LUT, freelancer edition
Maintain supporting records for audit and refunds, even though the portal usually does not ask for uploads at LUT filing time.
For practical nuances, see LUT in GST guide, GST on freelancers, and software export GST notes.
Step by step, how to apply LUT online using Form RFD-11
Apply each April so you never pause exports. Refer to this quick refresher, LUT in GST guide and field notes for freelancers, cross border freelancer GST update.
GST LUT validity and renewal, what to track
GST LUT validity is one financial year. File in April, valid till March 31, then renew. If you forget to renew, you must charge and pay IGST on export invoices until the new LUT is furnished, and then you can pursue refunds, which stresses cashflow.
There is also a realization rule. If payment against a LUT invoice is not received within one year from the invoice date, you must pay IGST with interest. After money arrives, you can apply for a refund. See more context in freelancer GST FAQs, export of services GST, and LUT in GST guide.
Invoicing under LUT and filing your GST returns
On every export invoice, add a clear note, Export of services, under LUT without payment of IGST, optionally include your LUT ARN.
Keep a tidy folder with your LUT acknowledgment, export invoices, e-FIRA or FIRC, contracts or platform statements, and return acknowledgments. Reference material, software export GST and GST on freelancers.
Common edge cases and mistakes freelancers make
Useful primers, export of services GST and GST on freelancers.
Real world example, a Bengaluru UI or UX designer
Priya, a Bengaluru based freelancer, registers under GST and files her LUT each April. She invoices her US client at zero GST, adds the LUT note, receives INR settlements from an international payment provider, and her bank or provider issues an e-FIRA for each receipt. She files GSTR-1 and GSTR-3B, and periodically claims ITC refunds on eligible expenses. Her cashflow stays smooth and her compliance is clean.
Choosing the right payment solution to simplify compliance
Payment infrastructure influences compliance. If your solution auto generates e-FIRA, consolidates forex conversions, and exports reports, your GST work becomes easier. For example, with Karbon Business, each inward remittance produces an e-FIRA within about a day, your dashboard maps forex to INR settlements, and reports are export ready for your CA. Other options include Wise Business, Payoneer, PayPal, RazorpayX International, and similar providers. Evaluate fees, currency coverage, and documentation quality.
Your copy paste compliance checklist
Before exporting
For every invoice
For every payment
Monthly or quarterly
Annually
Final compliance tip, automate your record keeping
Maintain e-FIRA or FIRC for every inward foreign payment, it is your strongest proof of export compliance. If you use a solution that automates e-FIRA, like Karbon Business, half the compliance burden is handled by default. If you work across multiple channels, keep a simple tracker with invoice number, payment date, e-FIRA date, and file location, update it monthly, and you will always be audit ready.
FAQ
What is a LUT for export of services India and who should use it
A LUT is an annual declaration on the GST portal that lets any GST registered freelancer or service exporter raise zero tax export invoices without paying IGST upfront. If you serve overseas clients and meet basic export conditions, a LUT keeps your cashflow intact and your exports zero rated.
How to apply LUT without bond under GST, any documents needed
Log in to the GST portal, go to Furnish LUT, select the year, tick declarations, and sign with DSC or EVC. Most freelancers do not need to upload attachments or give a bond. A bond with bank guarantee is required only in rare cases with serious past prosecution. For a quick reference, see the LUT in GST guide.
What is the GST LUT validity period, do I have to renew every year
Validity is one financial year, April to March. Yes, renew each April. If your LUT lapses and you keep issuing zero tax export invoices, the department can ask you to pay IGST with interest. Apply as soon as the new year starts.
Is freelancer services zero rated in India if I am paid in INR
Yes, as long as the money came from outside India through permitted banking channels, and your bank issues e-FIRA or FIRC to prove foreign inward remittance. Many freelancers prefer solutions like Karbon Business because e-FIRA is auto generated for each FX receipt.
Can I export services without GST registration if my turnover is below threshold
No. Without GST registration, you cannot furnish a LUT and you cannot treat your services as zero rated exports. If you expect to cross the threshold or want to export with proper compliance, register first, then file your LUT.
What exact line should I add on my export invoice under LUT
Add a clear note, Export of services, under LUT without payment of IGST, and optionally mention your LUT ARN. Ensure your invoice includes GSTIN, foreign client address, currency, description, and zero GST values.
Payment not received within one year, what to do in GST
Law requires you to pay IGST with interest for that invoice if realization does not happen within one year. When the money finally arrives, apply for a refund via RFD-01. A simple aging tracker helps you monitor invoices approaching the one year mark.
Do I need an IEC code to export services as a freelancer
No, IEC is optional for pure services. Your PAN and GST registration are enough. If you plan to export goods later, IEC becomes relevant.
I am getting paid through Upwork or Fiverr, how do I keep documents for GST
Save the platform payout statements, your export invoices, and the e-FIRA or FIRC issued by your bank or payment provider for each settlement. Tools like Karbon Business centralize settlements and auto generate e-FIRA, which simplifies audits and refunds.
Which is better for compliance, receiving USD or INR settlement in India
Both are fine for exports, provided you have proper bank proof. If you receive INR settlement, ensure the underlying transaction is a foreign inward remittance and collect e-FIRA or FIRC. A platform that issues e-FIRA automatically, for example Karbon Business, saves time and avoids missing documents.
Wise, Payoneer, bank wire, or Karbon Business, which works best for e-FIRA
Choose based on fees, currencies, and documentation. The must have is reliable e-FIRA or FIRC for every payment. Many freelancers prefer Karbon Business since it generates e-FIRA quickly and keeps FX to INR mapping clear for GST returns.
Can I file LUT mid year if I started exporting recently
Yes. Furnish LUT as soon as you begin exporting. For any export invoices issued before the LUT was furnished, you need to pay IGST and then pursue refunds for that period.
I received money from an Indian client using a foreign gateway, is it export
No. The location of your customer and place of supply drive the tax treatment. If your client is in India, it is a domestic supply even if the money flowed through an overseas processor. Charge regular GST in such cases.
How do I claim refund of unutilized ITC while exporting under LUT
File RFD-01 with supporting statements and ensure your export turnover and ITC details match your returns. Maintain invoices, e-FIRA or FIRC, and return acknowledgments. Accurate records, especially automated e-FIRA from solutions like Karbon Business, speed up the process.
Wrapping up, your next steps
You now have a clear path. Register under GST if eligible, furnish your LUT each April, invoice correctly under LUT, keep e-FIRA or FIRC for every foreign receipt, and file returns on time. Set reminders, automate records where possible, and your compliance will stay smooth while your cashflow stays healthy.
