Sell on Etsy From India: IEC, GST, AD Code and LUT in 7 Steps

To sell on Etsy, Amazon Global Selling or eBay from India and ship goods abroad, you need four things: an IEC from DGFT, GST registration, an AD code from your bank registered with customs, and a Letter of Undertaking (LUT) so you can export without paying IGST. The marketplace is only the shop. The export is yours.

Why does a marketplace sale need all this?

Because when your parcel leaves India, customs sees an export of goods by you. Etsy, Amazon or eBay provide the buyer and often the payment. They do not become the exporter. Para 2.05 of the Foreign Trade Policy 2023 says no export or import of goods shall be made without an IEC unless specifically exempted, and a commercial sale is not one of the exemptions.

So the paperwork comes from Indian law, not the marketplace's rulebook. The good news: it is the same set of four registrations whichever marketplace you use, and you do them once.

The four registrations at a glance

What is the LUT, and why does it matter?

Exports are zero-rated under GST. That means no GST is finally collected on them. You have two ways to get there. Either pay IGST when you export and claim it back as a refund, or file an LUT and export without paying IGST at all.

For a small seller, the LUT is almost always the better choice. Your money is not stuck in a refund. The GST portal's FAQ says any registered person can file it, except someone prosecuted for tax evasion of Rs 2.5 crore or more, and it must be filed before the export. It covers the financial year you choose and expires at the end of it. Filed one for 2025-26? You need a fresh one for 2026-27.

How to set up: step by step

1. Get GST registration if you do not have it. The LUT can only be filed by a registered person.
2. Apply for the IEC on dgft.gov.in. It is the same as your PAN but DGFT has to issue it. Our guide to applying online covers the form.
3. Ask your bank for the AD code on your business current account, and register it on ICEGATE so customs can link your shipping bills to that account.
4. File the LUT on gst.gov.in under Services, User Services, Furnish Letter of Undertaking. Pick the financial year, add two witnesses, and sign with DSC or EVC.
5. Open your seller account and list. Use the same business name everywhere: PAN, GST, IEC, bank and marketplace.
6. For each order, raise an export invoice in your name that says the supply is under LUT without payment of IGST, and ship through the marketplace's logistics, a courier or India Post.
7. Report the export in your GSTR-1 for the month, and make sure the payment reaches your bank within the time foreign exchange rules allow.

What each marketplace adds

Etsy. As on 12 Nov 2026, Etsy's fee page lists a listing fee of USD 0.20 per listing and a transaction fee of 6.5% of the order total, including the shipping you charge. A payment processing fee is added on top, and Etsy says that rate varies by country, so check the one shown in your shop settings. Etsy suits handmade and craft products, and you ship each order yourself.

Amazon Global Selling. As on 12 Nov 2026, Amazon's export documentation page for Indian sellers lists the IEC, the AD code and the LUT. It also describes a shipping option where a partner carrier handles the shipping and customs, which spares you the courier search but not the registrations.

eBay. Read eBay's current seller registration requirements before you sign up. Whatever eBay asks for, the Indian side does not change: IEC, GST, AD code and LUT.

A worked example

Sneha in Pune sells hand-painted coasters on Etsy. An order in the US comes to Rs 3,400 including the shipping she charges. Etsy's 6.5% transaction fee is Rs 221. Add the listing fee and the payment processing fee shown in her account.

Now GST. Say her product carries 5% GST. Without an LUT she pays IGST of Rs 170 on this sale and waits for a refund. With 30 orders a month, that is Rs 5,100 a month locked up. With an LUT filed in April, she pays nothing on export and keeps her cash moving. The portal asks no fee for the LUT.

The mistake people usually make

The most common one: shipping under the LUT, but in a financial year for which no LUT was filed. The old LUT expired on 31 March. Exports after that, without a fresh LUT, are treated as exports without one, and you may have to pay the IGST.

The second: names that do not match. The bank account is in the owner's personal name, the GST is in the shop name, and the IEC is in a third spelling. Banks and customs match these, and a mismatch holds up payments and shipments.

The third: forgetting the IEC yearly update. A code that is not updated between April and June is deactivated. See the IEC annual update for the window.

Can you do this yourself?

Yes, if your documents agree with each other and you are comfortable with two government portals. The IEC and the LUT are online forms. The AD code depends on your bank, so start that early. Get help when your business structure is changing, when names do not match, or when you would rather spend the week making stock.

Also note what changed this year: a CBIC circular dated 31 March 2026 removed the Rs 10 lakh value limit on commercial export consignments sent by courier. For most Etsy sellers this will not matter. For a seller shipping bulk orders by courier, it removes a reason to split consignments.

Frequently asked questions

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