How does GST work on export of services?

What qualifies as export of services under GST?

Section 2(6) of the IGST Act defines export of services. All five conditions must be met simultaneously:

Five conditions. Section 2(6) IGST Act

1. Supplier is located in India. You (the service provider) are in India
2. Recipient is located outside India. Your client is based outside India
3. Place of supply is outside India. Determined by Section 13 rules (see next section)
4. Payment is received in convertible foreign exchange. Or in INR where RBI permits
5. Supplier and recipient are not establishments of the same person. Your Indian entity and your client cannot be branches/subsidiaries of the same company

How does place of supply work for services?

Section 13 of the IGST Act determines place of supply when either the supplier or recipient is outside India. The general rule and key exceptions :

Place of supply rules. Section 13

General rule (Section 13(2))

Place of supply = location of the recipient . For most IT, consulting, design, and professional services, the place of supply is your foreign client's location → outside India → qualifies as export.

Exception: Services related to immovable property (Section 13(4))

Place of supply = location of the property. Architecture/engineering services for a building in India → place of supply is India → not an export even if the client is abroad.

Exception: Performance-based services (Section 13(3))

If goods are physically made available by the recipient to the supplier for services (e.g., repair, testing), place of supply = where services are performed. Repair work done in India → not export.

Exception: Events (Section 13(5))

Event management, exhibition, or training services → place of supply = event location. Conference organized in India for a foreign client → not export.

Common service types. Is place of supply outside India?

Software development for US client

. Yes (general rule, recipient in US)

Digital marketing for UK company

. Yes (general rule)

Legal advice to foreign company

. Yes (general rule)

CA/audit services for foreign entity

. Yes (general rule)

Interior design for a building in India

. No (immovable property exception)

Training workshop conducted in India

. No (event exception)

Is export of services zero-rated or exempt?

Export of services is zero-rated under Section 16 of the IGST Act. Not exempt. The distinction matters for ITC:

Two options for zero-rated service exports:

Option A: LUT + ITC Refund (recommended)

• • File LUT (Form RFD-11) before export
• • Invoice without IGST (0%)
• • Accumulate ITC on inputs
• • Claim ITC refund via Form RFD-01
• • No cash outflow on output

Option B: Pay IGST + Claim Refund

• • Charge IGST on export invoice
• • Use ITC to pay IGST (or pay in cash)
• • Claim IGST refund after filing GSTR-3B
• • Cash blocked until refund (30-60 days)
• • Simpler but worse for cash flow

How do I file LUT for export of services?

LUT (Letter of Undertaking) is filed as Form GST RFD-11 on the GST portal. It lets you export services without charging IGST.

LUT filing. Step by step

1. Log in to the GST portal → Services → User Services → Furnish Letter of Undertaking (LUT)
2. Select the financial year (April to March) for which LUT is being filed
3. Enter name, address, and occupation of two independent witnesses
4. Submit with DSC or EVC
5. LUT is effective immediately. You can issue zero-rated invoices from this date

LUT key facts

Validity

One financial year (April 1 to March 31)

Renewal

Must file fresh LUT before April 1 each year

Eligibility

Any GST-registered person, unless prosecuted for tax evasion > Rs 2.5 crore

Cost

Free. No fee or bond amount required

Form

GST RFD-11 (online on gst.gov.in)

How do I claim ITC refund on export of services?

If you export under LUT (no IGST charged), your ITC on inputs accumulates. Claim refund using Form GST RFD-01 . The refund formula from Rule 89(4):

Refund formula. Rule 89(4)

Refund = (Zero-rated turnover ÷ Adjusted total turnover) × Net ITC

Worked example. IT freelancer

Export turnover (zero-rated)

Rs 50,00,000 (approx. $60,000)

Domestic turnover

Rs 10,00,000

Total adjusted turnover

Rs 60,00,000

Net ITC accumulated

Rs 2,40,000 (on office rent, software, equipment)

Refund eligible

(50L ÷ 60L) × 2.4L = Rs 2,00,000

Documents for RFD-01

• Statement of invoices. Rule 89(2)(b)
• Declaration under Rule 89(2)(c). No CENVAT/ITC double-claim
• BRC/FIRC as proof of export proceeds receipt
• CA certificate (if refund amount exceeds Rs 2 lakh)

How should I invoice foreign clients under GST?

Export invoices have specific requirements under the GST invoice rules:

Export invoice checklist

• Your GSTIN, name, and address
• Invoice number (sequential, unique per financial year)
• Date of issue and date of supply
• Recipient name, address, and country
• SAC (Service Accounting Code) for each service line
• Value in foreign currency and equivalent INR (use RBI reference rate on date of invoice)
• Statement: "Supply meant for export under LUT without payment of IGST"
• LUT reference number and date
• Your bank details for receiving payment (with SWIFT/IFSC)

What are OIDAR rules for SaaS companies?

OIDAR (Online Information and Database Access or Retrieval) services have special GST rules. This affects SaaS companies, digital content providers, and online platforms.

When OIDAR rules apply

Indian SaaS selling to foreign businesses (B2B)

Normal export of services rules apply. Zero-rated under LUT. File GSTR-1 as usual. OIDAR special rules do not apply here.

Indian SaaS selling to foreign consumers (B2C)

Normal export of services rules apply. Zero-rated under LUT. OIDAR rules do not apply to Indian suppliers.

Foreign SaaS selling to Indian consumers (B2C). OIDAR applies

The foreign supplier must register in India under simplified registration, collect IGST from Indian non-business customers, and file Form GSTR-5A. This is where OIDAR rules bite. But it applies to foreign companies selling into India, not Indian exporters.

What goes in GSTR-1 and GSTR-3B for service exports?

GSTR-1. Table 6A

Report each export invoice in Table 6A. Exports with:

• • Invoice number and date
• • Port code: use ZZZZZ for services (no physical port)
• • Shipping bill number: enter 999999 for services
• • Shipping bill date: use invoice date
• • Type: "WOPAY" (without payment of tax, if under LUT) or "WPAY"
• • Invoice value in INR
• • IGST amount: 0 (if under LUT)

GSTR-3B. Table 3.1(b)

Report total export turnover in Table 3.1(b). Outward taxable supplies (zero rated) :

• • Total value: sum of all export invoice values (in INR)
• • IGST: 0 (if under LUT)
• • This line matches the total from Table 6A in GSTR-1

Sources & citations

• IGST Act 2017..
• Section 2(6) (export of services definition), Section 13 (place of supply), Section 16 (zero-rated supply)..
• CBIC Circular No. 8/8/2017-GST (LUT/Bond procedure). CGST Rules.
• Rule 89 (ITC refund), Rule 96 (IGST refund)..
• GST Portal tutorial: Furnishing of Letter of Undertaking for Export of Goods or Services (tutorial.gst.gov.in)..

Update history

• 2026-08-10 First published.