Penalty for not exporting within 3 months of a GST LUT invoice
When you file an LUT, you self-declare that you'll complete the export within 3 months of the invoice date (or any extended period the Commissioner allows). If that doesn't happen, you're required to pay the IGST on that invoice, plus interest at 18% per annum calculated from the invoice date until the tax is actually paid.
What the 3-month condition actually covers
This applies specifically to the timeline between raising an export invoice and completing the shipment or service delivery — not to how quickly you filed the LUT itself, and not to unrelated GST compliance deadlines.
How the interest is calculated
18% per annum, running from the date of the export invoice — not the date the 3-month window lapses — until the date the IGST is actually deposited. Delaying resolution doesn't reduce the exposure; it increases it.
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Check my eligibility →Does this cancel your LUT for future exports?
Missing the 3-month window on one invoice creates a liability on that specific transaction; it doesn't automatically revoke your LUT for other invoices. Repeated defaults, however, can put your continued eligibility at risk and push you toward the bond route instead.
Can the deadline be extended?
The RFD-11 self-declaration itself references "any extended period as may be allowed by the Commissioner" — meaning the 3-month window isn't always absolute. In practice, extensions are handled case by case rather than automatically, so if you know in advance that a shipment or service delivery will run past 3 months, it's worth raising this rather than assuming a blanket exemption applies.
What counts as “completing the export” for the 3-month rule?
For goods, it's generally the date of the shipping bill or the export declaration under the applicable customs process. For services, it's typically receipt of payment in convertible foreign exchange, since that's what establishes the supply as a completed export under GST.
This article is for general information only. For your specific situation, consult a practicing CA.
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