GST LUT filing two days before the deadline—working capital frozen
🎨 Sneha, 28, AundH, Pune. Freelance UX designer. Export-of-services contracts (US/UK clients). Discovered GST LUT (Letter of Undertaking) two days before deadline. Without it, ₹3.78 lakh in input tax would have been frozen awaiting export documentation.
🚨 The problem
Exporters of services can claim zero-rated GST (0% tax charged to international clients). But without filing an LUT, the input tax (18% paid on expenses) gets locked up until the exporter can substantiate the export claim through FIRCs or other documentation. For freelancers, this freezes working capital. The LUT eliminates this. Few designers know it exists.
🚀 How GabFORGE helped
The agent walked Sneha through the LUT filing in real time:
- 🔍 Verified eligibility. Confirmed that export-of-services freelancers qualify for LUT and zero-rated GST treatment without any annual turnover threshold.
- 💬 Translated the consequence of inaction. Plain language: without LUT, every export invoice would freeze 18% of revenue as locked input tax until FIRCs arrive — months of working capital tied up.
- 📞 Named the form and portal. GST Letter of Undertaking, gst.gov.in, Services → User Services → Furnish LUT. Free, 30 minutes, no chartered accountant required.
✅ Sneha filed two days before the deadline. The next GSTR-1 claimed zero-rating on all export invoices. Input tax credit flowed normally. ₹3.78 lakh stayed liquid.
🇮🇳 Why this matters
GST LUT is a one-time filing that protects export-of-services cash flow. Designers with international clients must know this exists. Waiting until the deadline to discover it is the hardest way to learn.
The long version has the export invoices, the input-tax freeze, the LUT discovery, and the working-capital impact.