Answer

1. F

   Facts

   There are two routes. Under LUT you export without IGST and claim refund of unutilised ITC through RFD-01. Under the other route you pay IGST on exports and get that IGST back; for goods the shipping bill acts as the refund claim, for services you file RFD-01.

2. P

   Provisions and law

   • Sec 16(3), IGST Act 2017Zero-rated supply can be made under LUT without IGST, with refund of unutilised ITC
   • Rule 96A, CGST Rules 2017Export under bond or Letter of Undertaking (RFD-11) without IGST
   • Rule 89, CGST Rules 2017Application for refund in RFD-01 with the prescribed statements
3. A

   Analysis

   Paying IGST blocks cash or credit until the refund arrives, but for goods the refund is automatic once GSTR-1 and GSTR-3B match the shipping bill. The LUT route avoids paying tax upfront but needs a formal RFD-01 claim. Most service exporters choose LUT. Exporters with heavy capital goods credit sometimes prefer the IGST route because capital goods credit can be used to pay IGST.

4. C

   Conclusion

   1. 1Compare cash flow under both routes for your next year
   2. 2Check how much of your credit is on capital goods
   3. 3Pick one route and apply it consistently to invoices
   4. 4Set up the matching return and refund process

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