Is GST applicable on export of services?

Is GST charged on export of services?

No. An export of services is a zero-rated supply under section 16(1) of the IGST Act. Zero-rated is not the same as exempt: you charge no tax to the foreign client, but you keep the input tax credit on what you bought to make the supply, and you can get unused credit refunded. The catch is that the supply must actually be an export, as the Act defines it.

What are the five conditions for export of services?

Zero-rated vs exempt: what is the difference?

How do I know the place of supply is outside India?

For most services the place of supply is the location of the recipient (section 13(2)), so a client abroad puts it outside India. But sections 13(3) to 13(13) set their own rules for particular services, and some can put the place of supply in India even when the client is abroad — for example, services on goods the client makes physically available to you in India, services tied to immovable property in India, or events held in India. If your work touches any of these, check it with your CA before you invoice under an LUT.

What changed for intermediary services in 2026?

Until 29 March 2026, section 13(8)(b) put the place of supply of intermediary services — brokers and agents who arrange a supply between two other parties — at the supplier’s location, which meant an Indian intermediary working for a foreign client could not count as an exporter. Section 157 of the Finance Act, 2026 omitted that clause with effect from 30 March 2026. Intermediary services now follow the general rule, so one supplied to a recipient abroad can be a zero-rated export when the other conditions are met. For invoices from before 30 March 2026, ask your CA how the old rule applies.

LUT, or pay IGST and claim a refund?

• Under an LUT: invoice without IGST, and claim a refund of unused input tax credit if you build one up. No cash is locked up in tax. This is what most service exporters do.
• On payment of IGST: charge and pay IGST on the export, then claim that IGST back as a refund. Cash is tied up until the refund arrives.

How do I file an LUT (Form GST RFD-11)?

1. Log in to the GST portal and go to Services > User Services > Furnish Letter of Undertaking (LUT).
2. Select the financial year the LUT is for. One LUT covers one financial year, so file a fresh one each year — ideally before your first export invoice of the year.
3. Enter the name, address and occupation of two independent witnesses.
4. Tick the self-declarations, then preview the form.
5. Sign and file it with a DSC or EVC. The portal generates an ARN and an acknowledgement.
6. Track it under View My Submitted LUTs. If the tax officer takes no action within 3 working days, it shows as deemed approved.

CBIC’s Circular 8/8/2017-GST extended the LUT to all registered persons except those prosecuted for the offences it specifies. Without an LUT, you pay IGST upfront and wait for the refund.

What goes on an export invoice?

• The endorsement rule 46 requires: "SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX" (or "SUPPLY MEANT FOR EXPORT ON PAYMENT OF INTEGRATED TAX" if you pay IGST).
• Your LUT reference (the ARN) for the financial year.
• The client’s name and overseas address, the SAC, and the value in the invoice currency.
• The purpose code and the payment instructions.

What if the payment never arrives?

An LUT is a promise. For services, rule 96A expects the payment within one year of the invoice, or the period FEMA allows including any RBI extension, whichever is later. If it does not arrive, you pay the IGST with interest within 15 days after that. The FEMA side has its own 9-month realisation period — track both from the invoice date.

Do I need GST registration at all?

You must register once your aggregate turnover passes ₹20 lakh in a financial year (₹10 lakh in special category states), and export turnover counts towards that figure. Exports are inter-State supplies, but Notification 10/2017–Integrated Tax exempts suppliers of inter-State services from compulsory registration while they stay within the threshold. So a small freelancer with only foreign clients need not register just because the clients are abroad. Registration also brings the LUT and refund route with it — confirm the timing with your CA.

The proof GST relies on

Each remittance advice backs the zero-rated turnover in your returns and any refund claim. Keep it with the invoice it belongs to. For how the payment itself reaches you, see the complete guide to receiving international payments in India or how export collections work.