Answer

1. F

   Facts

   Both routes are legal under Sec 16(3) of the IGST Act. Under LUT you pay no IGST and claim refund of accumulated ITC. With IGST, goods exporters get an automated refund through customs and service exporters claim it in RFD-01.

2. P

   Provisions and law

   • Sec 16(3), IGST Act 2017Zero-rated supply can be made under bond or LUT without paying IGST, with refund of unused ITC
   • Rule 89, CGST Rules 2017Refund of unused ITC under LUT
   • Rule 96, CGST Rules 2017Refund of IGST paid on export of goods through the shipping bill
3. A

   Analysis

   Service exporters usually prefer LUT because cash is not blocked. Goods exporters with large ITC sometimes prefer IGST payment because Rule 96 refunds are automatic once the shipping bill and returns match. Check if your goods are on any list barred from the IGST route, check the latest notification. Work out cash flow for 3 months both ways.

4. C

   Conclusion

   1. 1List your monthly exports and ITC.
   2. 2Compute cash blocked under each route.
   3. 3Check any notification restricting IGST-paid exports for your goods.
   4. 4Choose and apply consistently.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.