If you are an Indian freelancer with a GST registration, you might be worried about the 18% tax eating into your global profits. However, the Indian government provides a massive benefit for service exporters: the Letter of Undertaking (LUT).
1. Why You Need an LUT
Under GST law, "Export of Services" is considered a zero-rated supply. This means you don't have to charge GST to your US or UK clients[cite: 2]. But to do this without paying the tax upfront and claiming a refund later, you must file an LUT annually on the GST portal.
2. Invoicing with an LUT
When you use our Invoice Maker, you should not add a tax percentage for international clients. Instead, add this mandatory legal note to your PDF invoice:
"Supply of services intended for export under LUT without payment of integrated tax."
3. Protecting Your Business Data
Filing for an LUT requires uploading business proof and IDs. In the age of AI scraping, be careful where you process these documents.
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Frequently Asked Questions (FAQ)
Do I need an LUT if I'm not GST registered?
No. If your freelance income is below ₹20 Lakhs, you aren't required to register for GST, so you don't need an LUT.
How often do I need to renew my LUT?
An LUT is valid for one financial year (April to March). You must file a fresh LUT every April to continue invoicing international clients tax-free.
Can the client ask for my LUT?
Rarely. The LUT is for the Indian tax department (GSTN). Your client only needs to see the "Zero-Rated" note on your professional invoice.