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Section 16 IGST Act & Rule 96A CGST Rules

Zero-Rated Exports under Letter of Undertaking (LUT): Form RFD-11, FIRC Banking Audits & GST Refund Protocols

Published: February 01, 20256 min readEffective: Annual LUT Renewal by March 31Due: Prior to commencing exports in the Financial Year

View Official Gazette / Govt Source Consult Senior Partner

Executive Regulatory Summary

Export of goods and services is treated as 'zero-rated supply' under Section 16 of the IGST Act. Complete operational guide on executing annual Letter of Undertaking (LUT via Form RFD-11), satisfying the five statutory conditions for export of services, foreign remittance FIRC / BRC tracking, and claiming unutilized ITC refunds through Form RFD-01.

Key Statutory Takeaways

Online LUT in Form RFD-11 must be filed before the beginning of every financial year to export without payment of IGST.
For services, five statutory conditions must be satisfied: supplier in India, recipient outside India, place of supply outside India, convertible foreign exchange receipt, and non-establishment relationship.
Foreign Inward Remittance Certificates (FIRC) or Electronic BRCs must be maintained for every export invoice.
Refund of unutilized Input Tax Credit can be claimed every month or quarter using Form RFD-01.

Actionable Compliance Checklist for Businesses

Step-by-step advisory measures prescribed by ASGR and CO for immediate adherence:

1File online LUT in Form RFD-11 on the GST portal for the upcoming financial year before April 1st.

2Review customer contracts to ensure the place of supply legally qualifies as outside India under Section 13.

3Reconcile bank realization statements (BRC/FIRC) against export invoice numbers within statutory 9-month window.

4Submit monthly refund applications in Form RFD-01 to recover input tax credits on office rent and software licenses.

1. The Strict 5-Point Test for Export of Services

Departmental officers frequently dispute service exports, alleging that the Indian service provider acted as an 'intermediary' under Section 13(8)(b). Drafting clear principal-to-principal international service contracts is essential to safeguard zero-rated tax status.

Target Entities Governed by this Notification:

IT / ITES Exporters & Software CompaniesCross-Border Management Consultants & AgenciesBPO & KPO Service ProvidersCFOs of Export Oriented Units (EOUs)

Advisory Published By

CA Ghanshyam Sharma

Partner - Direct Tax & Audit • B. Com, FCA, Concurrent Bank Auditor

ASGR and CO, Chartered Accountants (Peer Review Certified: #018Xxx)

Statutory Disclaimer: This publication is compiled by ASGR and CO solely for general informational and educational purposes to assist corporate clients and peers in understanding statutory notifications. It does not constitute legal, tax, or formal secretarial advice. Before acting upon any provisions, specific professional counsel should be sought.

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