{"id":24984,"date":"2025-12-03T15:30:55","date_gmt":"2025-12-03T10:00:55","guid":{"rendered":"https:\/\/blog.razorpay.in\/blog\/?p=24984"},"modified":"2026-02-09T12:45:54","modified_gmt":"2026-02-09T07:15:54","slug":"gst-foreign-exchange-india-guide","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/gst-foreign-exchange-india-guide\/","title":{"rendered":"GST on Foreign Exchange in India: The Definitive Guide for 2026"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">If you work with clients outside India or receive money in foreign currency, you\u2019ll often see small GST-related charges on your transactions. These apply because converting or handling foreign currency is treated as a taxable service in India.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For exporters, freelancers, and online sellers, knowing how this tax works helps you avoid confusion, manage costs, and handle documents like Foreign Inward Remittance Certificate (FIRC) or Bank Realisation Certificate (BRC) correctly\u2014especially when your exports are zero-rated.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Continue reading this guide to understand the GST rates on foreign exchange in India, how it is calculated, and what it means for your<\/span><b> international payments<\/b><span style=\"font-weight: 400;\"> and regular filings.<\/span><\/p>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<p><strong style=\"color: #0073aa; font-size: 18px;\">Key Takeaways<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">GST on foreign exchange applies only to the service value, not the actual foreign currency you receive or convert.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Export services qualify as zero-rated supplies, but you must maintain proper FIRC\/BRC documentation to claim refunds.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Banks and authorised dealers follow fixed, government-prescribed methods to compute GST on forex conversions, so charges stay consistent.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Strong record-keeping and using RBI-authorised channels for receiving money from abroad make GST compliance for foreign exchange simple and predictable.<\/span><\/p>\n<\/div>\n<h2><b>Understanding GST on Foreign Exchange Transactions<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">When you <\/span><b>exchange currency<\/b><span style=\"font-weight: 400;\"> or receive money from overseas, the service provider, usually a bank or authorised forex dealer, performs a taxable service under GST. This tax applies not to the money you\u2019re receiving, but to the service of converting or facilitating the transaction. For exporters, freelancers, and SaaS businesses, understanding this helps you avoid confusion when reviewing bank charges or filing returns.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are the key points you should be clear about:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Foreign exchange service refers to converting one currency into another (e.g., USD to INR) or processing an inward remittance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>GST applies<\/b><span style=\"font-weight: 400;\"> only to the service value, not the full amount you receive in foreign currency.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Banks, AD-II licence holders, and authorised fintechs charge <\/span><b>GST on the forex service<\/b><span style=\"font-weight: 400;\"> they provide.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rates vary based on slabs defined by the government, and the taxable value is calculated using RBI reference rates.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Export transactions remain zero-rated, but forex conversion charges for receiving money can still carry GST.<\/span><\/li>\n<\/ul>\n<h2><b>GST Rates and Calculation Methods for Currency Exchange<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">When you <\/span><b>exchange currency<\/b><span style=\"font-weight: 400;\"> or receive money from overseas, the GST you pay depends on how your bank or payment provider calculates the value of the service. These rules are applied consistently across banks, authorised dealers, and fintech platforms. Knowing how this value is computed helps you verify the charges and avoid paying more than necessary.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Foreign exchange conversion services carry<\/span> <span style=\"font-weight: 400;\">18% GST<\/span><span style=\"font-weight: 400;\">, and the taxable value is computed using one of two methods prescribed under<\/span> <span style=\"font-weight: 400;\">Rule 32 of the CGST Rules, 2017<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>Method 1: Calculation-based<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Used when one currency is INR <\/span><b>and<\/b><span style=\"font-weight: 400;\"> an RBI reference rate is available.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The taxable value is the difference between the transaction rate and the RBI reference rate, multiplied by the units of currency exchanged.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Suppose you convert $4,000 into INR. Your bank offers a rate of \u20b984.50 per USD, while the RBI reference rate for the day is \u20b984.10.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The taxable value will be the difference between the two rates:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u2192\u20b984.50 \u2013 \u20b984.10 = \u20b90.40<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">\u2192\u20b90.40 \u00d7 4,000 = \u20b91,600<\/span><\/p>\n<p><span style=\"font-weight: 400;\">GST at 18% will be applied on this \u20b91,600 service value.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the RBI reference rate is not available, the taxable value becomes 1% of the total INR amount received or supplied.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This method is commonly used for routine USD\u2013INR or EUR\u2013INR conversions where the RBI publishes daily rates.<\/span><\/li>\n<\/ul>\n<h3><b>Method 2: Slab-based\u00a0<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Here, the service value is derived from fixed slabs based on the INR value of the transaction:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Transaction Amount (INR)<\/b><\/td>\n<td><b>Service Value (for GST calculation)<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>Up to \u20b91,00,000<\/b><\/td>\n<td><span style=\"font-weight: 400;\">1% of the amount (minimum \u20b9250)<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>\u20b91,00,001 to \u20b910,00,000<\/b><\/td>\n<td><span style=\"font-weight: 400;\">\u20b91,000 + 0.5% of the amount exceeding \u20b91,00,000<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Above \u20b910,00,000<\/b><\/td>\n<td><span style=\"font-weight: 400;\">\u20b95,500 + 0.1% of the amount exceeding \u20b910,00,000 (GST capped at \u20b960,000)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">Banks and authorised dealers must follow the same calculation method for the entire financial year, so the way your charges are computed stays consistent.\u00a0<\/span><\/p>\n<h3><b>GST Calculation Methods for Forex Transactions<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td><b>Criteria<\/b><\/td>\n<td><b>Calculation-Based<\/b><\/td>\n<td><b>Slab-Based\u00a0<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>Basis of Calculation<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Difference between transaction rate and RBI reference rate \u00d7 units exchanged<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Fixed slabs based on INR transaction value<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>When Used<\/b><\/td>\n<td><span style=\"font-weight: 400;\">When the RBI reference rate is available and one currency is INR<\/span><\/td>\n<td><span style=\"font-weight: 400;\">When the reference rate is unavailable or the institution chooses a slab-based system<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>GST Rate<\/b><\/td>\n<td><span style=\"font-weight: 400;\">18%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">18%<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Example 1<\/b><span style=\"font-weight: 400;\"> (Forex value: \u20b950,000)<\/span><\/td>\n<td>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If RBI rate = \u20b983.00 and transaction rate = \u20b983.40<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Difference: \u20b983.40 &#8211; \u20b983 = \u20b90.40 \u00d7 units = Taxable value<\/span><\/li>\n<\/ul>\n<\/td>\n<td><span style=\"font-weight: 400;\">1% of \u20b950,000 = \u20b9500 (\u2265\u20b9250 minimum)<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Example 2<\/b><span style=\"font-weight: 400;\"> (Forex value: \u20b93,00,000)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">The same difference-based calculation applies<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u20b91,000 + 0.5% of \u20b92,00,000 = \u20b91,000 + \u20b91,000 = \u20b92,000\u00a0 (GST applicable on this value)<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Example 3<\/b><span style=\"font-weight: 400;\"> (Forex value: \u20b915,00,000)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">The same difference-based calculation applies<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u20b95,500 + 0.1% of \u20b95,00,000 = \u20b95,500 + \u20b9500 = \u20b96,000 (GST applicable on this value)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><b>Zero-Rated Supplies: GST on Export of Services<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">When you <\/span><b>export services <\/b><span style=\"font-weight: 400;\">to clients outside India, the GST framework treats these transactions differently from domestic supplies. Exports fall under the category of zero-rated supply, which means the exported service itself is not taxed, and you retain the right to claim credits on the input taxes you\u2019ve already paid. This helps reduce your overall cost of servicing global customers and keeps your pricing competitive.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are the key points you should know:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Export of goods and services is treated as a <\/span><b>zero-rated supply under GST<\/b><span style=\"font-weight: 400;\">, meaning GST is not charged on the value of the exported service.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You are still eligible to claim <\/span><b>Input Tax Credit <\/b><span style=\"font-weight: 400;\">(ITC) on goods and services used to deliver your export services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To qualify as an export of service, the supplier must be in India and the recipient must be outside India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The payment has to be received in convertible foreign currency (or in INR wherever permitted by RBI rules).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The place of supply must be outside India for the service to be considered an export.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Most businesses file a <\/span><b>Letter of Undertaking<\/b><span style=\"font-weight: 400;\"> (LUT) on the GST portal so they can export services without paying IGST upfront.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If an LUT is not filed in time, you may need to pay IGST first and then claim a refund later, which affects cash flow.<\/span><\/li>\n<\/ul>\n<h2><b>FIRC, BRC, and Documentation for Foreign Inward Remittances<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">When you receive money from an overseas client, your bank issues documents that act as proof of the inward remittance. For exporters, freelancers, and SaaS businesses, this proof is what links your export invoices to the money received from abroad. Without it, refund applications under zero-rated supplies can face delays or queries.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That\u2019s why understanding documents like FIRC, BRC, and FIRA helps you stay prepared during GST verification.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s what you should know:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Foreign Inward Remittance Certificate<\/b><span style=\"font-weight: 400;\"> and <\/span><b>Bank Realisation Certificate<\/b><span style=\"font-weight: 400;\"> serve as primary proof of receiving foreign currency.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A FIRC confirms the receipt of funds into India and is often required for FEMA compliance and GST refund claims.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A BRC links the payment to a specific export invoice, which is crucial for validating the export of goods or services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Reserve Bank of India<\/span> <span style=\"font-weight: 400;\">discontinued physical FIRCs<\/span> <span style=\"font-weight: 400;\">for most export\u2010related remittances in 2016; banks now issue Foreign Inward Remittance Advice (FIRA) and e-FIRC.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">GST authorities review your BRCs or FIRCs\/FIRAs while processing refund applications to verify that the export payment was actually received.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Maintain proper records\u2014invoices, FIRAs, bank statements, and payment credits\u2014to support zero-rated export claims.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">E-BRCs available on the DGFT portal are now commonly used to validate export payments during GST refund applications and audits.<\/span><\/li>\n<\/ul>\n<h2><b>Key Considerations for GST Compliance on Foreign Exchange<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">If you receive payments from abroad or convert currency regularly, keeping your GST compliance in order is simpler than it seems. You just need the right documents, the right channels, and a clear understanding of how GST applies to your foreign exchange activity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are the essentials you should always keep in mind:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Register for GST when your turnover crosses the threshold, even if most of your income comes from exports.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mark every export invoice as zero-rated, and ensure the invoice follows GST format requirements.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Keep detailed records of all foreign exchange transactions\u2014conversion slips, bank charges, GST deductions, FIRC\/BRC, and payment advice.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Stay updated on GST changes, especially rules linked to international transactions and export benefits.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Use RBI-authorised banks or dealers for foreign currency conversions to stay fully compliant with regulations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Remember that travel card usage attracts GST, but only on the service fee for loading or reloading the card.<\/span><\/li>\n<\/ul>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<p><strong style=\"color: #0073aa; font-size: 18px;\">Did You Know?<\/strong><\/p>\n<p style=\"margin-top: 10px;\">You only need to register for GST if your yearly turnover crosses the set limit\u2014\u20b940 lakh for goods and \u20b920 lakh for services (lower in some Northeastern and hill states).<\/p>\n<\/div>\n<h3><b>Checklist: GST Compliance for Foreign Exchange Transactions\u00a0<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>GST registration<\/b><span style=\"font-weight: 400;\"> completed (if turnover exceeds threshold)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Export invoices marked as zero-rated<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">FIRC\/BRC collected for all international receipts<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>GST on forex<\/b><span style=\"font-weight: 400;\"> service fees reviewed for accuracy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Only RBI-authorised channels are used for foreign currency conversion.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Regularly track updates on GST rules for international transactions.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<\/ul>\n<h2><b>Automate Your International Payments with Razorpay Payment Gateway<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Managing international payments becomes far easier when your payment system handles currency conversion, documentation, and compliance in the background. With a modern <a href=\"https:\/\/razorpay.com\/payment-gateway\/\">payment gateway<\/a>, you can focus on your work while the platform manages the complex parts of cross-border transactions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s how Razorpay helps streamline the process:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Accept payments in 130+ global currencies, making it simple for overseas customers to pay you in their local currency.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Receive settlements directly in INR, so your accounts stay clean and you don\u2019t have to manage separate foreign currency balances.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Get digital FIRCs automatically, which cuts out manual follow-ups with banks and supports smoother GST compliance for export services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rely on built-in security features, including fraud detection systems and PCI DSS Level 1 compliance, for safer cross-border transactions.<\/span><\/li>\n<\/ul>\n<div style=\"background-color: #f5f9fc; padding: 32px 24px; border-radius: 12px; text-align: center; max-width: 720px; margin: 0 auto;\">\n<h2 style=\"color: #1a73e8; margin-bottom: 12px; font-size: 24px; font-weight: bold;\">Ready to streamline your payments?<\/h2>\n<p><a style=\"background-color: #1a73e8; color: #ffffff; font-weight: 600; padding: 12px 24px; border-radius: 8px; font-size: 16px; text-decoration: none; display: inline-block;\" href=\"https:\/\/razorpay.com\/\"><em><strong>Get Started with\u00a0Razorpay<\/strong><\/em><\/a><\/p>\n<\/div>\n<h2><b>Conclusion<\/b><\/h2>\n<p><b>GST on foreign exchange<\/b><span style=\"font-weight: 400;\"> becomes much easier to manage when you know that it applies mainly to the service fee charged for converting or processing foreign currency\u2014not the value of the currency itself. Having clarity on how banks compute these charges helps you understand your statements better and stay on top of your compliance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For exporters, GST continues to be favourable because export services are treated as zero-rated. This allows you to claim input tax credit and keep your tax outflow lower. To support your claims and ensure smooth refunds, keep essential documents organised, including FIRAs, BRCs, invoices, and bank statements.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With clear records and an understanding of how GST applies to foreign exchange transactions, staying compliant becomes far simpler.<\/span><\/p>\n<h2><b>FAQs<\/b><\/h2>\n<h3><b>1. Is GST applicable on foreign currency conversion?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. GST applies to the service fee charged by banks or authorised dealers when you convert foreign currency.\u00a0<\/span><\/p>\n<h3><b>2. How is GST calculated on foreign exchange transactions?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">GST is calculated using either the RBI reference rate method or the slab-based method. The RBI method uses the difference between the transaction rate and the RBI reference rate, while the slab method applies fixed percentages based on the INR value of the exchange.<\/span><\/p>\n<h3><b>3. Are international payments for export services subject to GST in India?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">No. Payments you receive for exporting services are treated as zero-rated under GST, so you don\u2019t charge tax on them.<\/span><\/p>\n<h3><b>4. What is the role of FIRC and BRC in GST compliance for exporters?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">FIRC and BRC serve as proof of receiving foreign currency for exports. These documents are required to claim GST refunds on zero-rated supplies and meet compliance.<\/span><\/p>\n<h3><b>5. What is the GST rate on loading an international travel currency card?<\/b><\/h3>\n<p><a href=\"https:\/\/www.icici.bank.in\/personal-banking\/cards\/forex-cards\/schedule-of-charges#:~:text=All%20fees%20and%20charges%20mentioned%20are%20exclusive%20of%20taxes.%20Goods%20and%20Services%20Tax%20%2D%2018%25%20effective%20from%20Mar%201%2C%202020\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">GST of 18%<\/span><\/a><span style=\"font-weight: 400;\"> applies to the service fee for loading or reloading a travel or forex card. The tax is only on the service component.<\/span><\/p>\n<h3><b>6. Do I need to file a Letter of Undertaking for zero-rated exports?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. Filing an LUT on the GST portal allows you to export goods or services without paying IGST upfront, while still enabling you to claim input tax credit.<\/span><br \/>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Is GST applicable on foreign currency conversion?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. GST applies to the service fee or markup charged by banks or authorised money changers when you convert foreign currency into INR or vice versa.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"How is GST calculated on foreign exchange transactions?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"GST on foreign exchange transactions is calculated using either the RBI reference rate method or a slab-based method. 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They are essential for claiming GST refunds on zero-rated supplies and meeting export compliance requirements.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the GST rate on loading an international travel currency card?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"GST at 18% applies to the service fee charged for loading or reloading an international travel card or forex card. GST is not charged on the currency amount, only on the service component.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Do I need to file a Letter of Undertaking for zero-rated exports?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. Filing a Letter of Undertaking (LUT) on the GST portal allows you to export goods or services without paying IGST upfront, while still enabling you to claim input tax credit.\"\n      }\n    }\n  ]\n}\n<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you work with clients outside India or receive money in foreign currency, you\u2019ll often see small GST-related charges on your transactions. These apply because converting or handling foreign currency is treated as a taxable service in India. For exporters, freelancers, and online sellers, knowing how this tax works helps you avoid confusion, manage costs,<\/p>\n","protected":false},"author":142,"featured_media":25263,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1067],"tags":[],"class_list":{"0":"post-24984","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-cross-border"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/24984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/142"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=24984"}],"version-history":[{"count":4,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/24984\/revisions"}],"predecessor-version":[{"id":25881,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/24984\/revisions\/25881"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/25263"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=24984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=24984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=24984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}