What is an LUT (Letter of Undertaking) and how does it help textile exporters from India?

Under Indian GST law, export of goods is classified as a "zero-rated supply". Exporters have two options:

• Export under LUT (Recommended): File an online LUT on the GST portal before shipping; export your sarees, kurtis, or fabrics with zero IGST payment.
• Export on Payment of IGST: Pay 5% or 12% IGST on the invoice and claim a cash refund later from the customs department (ties up cash flow for months).

Ensure your custom broker or freight forwarder files the Shipping Bill with correct export invoice details.