{"id":26126,"date":"2026-02-26T13:47:48","date_gmt":"2026-02-26T08:17:48","guid":{"rendered":"https:\/\/blog.razorpay.in\/blog\/?p=26126"},"modified":"2026-04-17T15:54:09","modified_gmt":"2026-04-17T10:24:09","slug":"conditions-for-export-of-services-under-gst","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/conditions-for-export-of-services-under-gst\/","title":{"rendered":"What Are the Conditions for Export of Services Under GST?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">If you sell services to clients outside India, getting the export of services under GST classification matters more than you may think. Under the GST framework, qualifying service exports are treated as<\/span><b> zero-rated<\/b><span style=\"font-weight: 400;\"> supplies under the <\/span><b>IGST Act<\/b><span style=\"font-weight: 400;\">. This allows you to export services without charging GST while still claiming input tax credits.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meeting the prescribed <\/span><b>conditions for export of services under GST<\/b><span style=\"font-weight: 400;\"> helps you protect margins and stay price-competitive globally. It also ensures smoother refunds and cleaner compliance, which is critical for SaaS firms, agencies, and service exporters dealing with overseas clients.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Misreading these rules can lead to tax demands, blocked refunds, and loss of export benefits. GST law therefore sets out five specific statutory conditions that define service exports in India. Continue reading to understand each condition clearly and how to apply them in practice.<\/span><\/p>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<h2 style=\"color: #0073aa; font-size: 18px; margin: 0 0 8px 0; display: inline-block;\">Key takeaways<\/h2>\n<ul style=\"display: inline-block; margin: 0 0 0 10px; padding-left: 18px; vertical-align: top;\">\n<li>Export of services under GST is zero-rated only when all five Section 2(6) conditions are met together.<\/li>\n<li>Place of supply and foreign exchange realisation are the most common compliance risk areas for service exporters.<\/li>\n<li>Small service exporters can operate without <a href=\"https:\/\/razorpay.com\/learn\/gst-registration-eligibility-process-documents-and-penalties\/\">GST registration<\/a> until the \u20b920 lakh \/ \u20b910 lakh threshold is crossed.<\/li>\n<li>Intermediary and certain banking services often lose export status due to special place-of-supply rules.<\/li>\n<li><a href=\"https:\/\/razorpay.com\/blog\/firc-certificate\/\">FIRCs<\/a> or <a href=\"https:\/\/razorpay.com\/blog\/e-fira\/\">FIRAs<\/a> are essential documents for claiming <a href=\"https:\/\/razorpay.com\/learn\/what-is-gst-refund\/\">GST refunds<\/a> on service exports.<\/li>\n<li>Regularly tracking GST circulars helps avoid disputes on distinct person and intermediary rules.<\/li>\n<\/ul>\n<\/div>\n<h2><b>What Are the Five Conditions for Export of Services Under GST?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">GST law follows a strict definition of export of services under GST. As per <\/span><b>Section 2(6) of the IGST Act<\/b><span style=\"font-weight: 400;\">, a service qualifies as an export only when all five conditions are met together. If any one of these conditions fails, the supply is treated as an inter-State transaction under GST, bringing tax liability, interest, and added compliance risk.<\/span><\/p>\n<h3><b>Is the Supplier of Service Located in India?<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The service provider must be registered and located in India\u2019s taxable territory.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The GST registration establishes the supplier\u2019s legal presence.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Services delivered from overseas branches or foreign offices do <\/span><b>not<\/b><span style=\"font-weight: 400;\"> qualify as Indian exports.<\/span><\/li>\n<\/ul>\n<h3><b>Is the Recipient of Service Located Outside India?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The recipient must be legally located outside India based on their place of incorporation or residence. If the recipient is physically present in India when the service is performed, this condition can become disputed and needs careful review.<\/span><\/p>\n<h3><b>Is the Place of Supply Outside India?<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The place of supply must fall outside India to meet export conditions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Place of supply is decided based on the rules in Section 13 of the <a href=\"https:\/\/razorpay.com\/learn\/what-is-igst\/\">IGST Act<\/a>.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The actual destination and use of the service matter more than the billing address.<\/span><\/li>\n<\/ul>\n<h3><b>Is Payment Received in Convertible Foreign Exchange?<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You must receive payment in convertible foreign currency within the timeline prescribed by RBI.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">RBI allows payment in INR for notified territories such as Nepal and Bhutan subject to specific approvals and conditions.<\/span><\/li>\n<\/ul>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<h2 style=\"color: #0073aa; font-size: 18px; margin: 0;\">Did You Know?<\/h2>\n<p style=\"margin-top: 10px;\"><i><span style=\"font-weight: 400;\">Receiving payments in INR from Nepal or Bhutan may cause your service export to be treated as exempt instead of zero-rated. If that happens, you cannot claim input tax credit refunds on expenses like software, rent, or equipment, which is why many exporters prefer receiving payment in convertible foreign exchange.<\/span><\/i><\/p>\n<\/div>\n<h3><b>Are the Supplier and Recipient Distinct Persons?<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">GST disallows exports between establishments of the same legal entity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A foreign branch and Indian head office count as the same person.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A foreign subsidiary qualifies as a separate person.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This distinction follows recent clarifications from the Central Board of Indirect Taxes and Customs.<\/span><\/li>\n<\/ul>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<p style=\"color: #0073aa; font-size: 18px; margin: 0;\"><strong><span style=\"color: #0073aa;\"><span style=\"font-size: 18px;\">Pro Tip: <\/span><\/span><\/strong><span style=\"color: rgba(0,0,0,0.74); font-size: 19px; font-weight: 400;\">Always validate all five conditions together before raising your invoice\u2014failing even one can convert a tax-free export into a taxable GST supply.<\/span><\/p>\n<\/div>\n<h2><b>Is GST Registration Mandatory for Export of Services?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Under GST, exports of goods and services are classified as inter-State supplies. As a rule, Section 24 of the <a href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/\">CGST<\/a> Act, 2017 requires persons making inter-State supplies to register for GST. However, service exporters get a specific relaxation. If a service exporter\u2019s total annual turnover remains below the \u20b920 lakh exemption limit, GST registration is not mandatory.<\/span><\/p>\n<p style=\"text-align: center;\"><a style=\"background-color: #1a73e8; color: #ffffff; font-weight: 800; padding: 7px 15px; border-radius: 7px; font-size: 16px; text-decoration: none; display: inline-block; white-space: nowrap;\" href=\"https:\/\/razorpay.com\/international-payment-gateway-india\/?utm_source=blog&amp;utm_medium=referral&amp;utm_campaign=internationalpayments\">Explore Razorpay&#8217;s Global Payment Solutions<\/a><\/p>\n<h3><b>GST Registration Requirements: Domestic vs Export services<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td><b>Criteria<\/b><\/td>\n<td><b>Domestic Service Provider<\/b><\/td>\n<td><b>Exporter of Services<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Nature of supply<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Intra-State or inter-State within India<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Treated as inter\u2011State (and as zero\u2011rated if conditions for export of services are met)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Turnover below \u20b920 lakh (\u20b910 lakh for special states)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">GST registration not required<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Generally not required\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Turnover crossing threshold<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Mandatory registration within 30 days<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Registration mandatory for LUT and claim refunds<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Eligibility to claim ITC refund<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Generally no<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Available only after registration<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><b>How is the Place of Supply Determined Under Section 13?<\/b><\/h2>\n<p><b>Section 13 of the IGST Act <\/b><span style=\"font-weight: 400;\">comes into play when either you or your client is located outside India. This section decides whether your service genuinely qualifies as an export or gets treated as a taxable domestic supply. While the law starts with a simple default rule, it also carves out specific exceptions that often trip up exporters.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In practice, many services fail the export test not because of where the client sits, but because Section 13 overrides the general rule based on how and where the service is performed. Understanding these distinctions early helps you avoid refund rejections and GST disputes.<\/span><\/p>\n<h3><b>When Does the Default Rule (Section 13(2)) Apply?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">For most intangible and remote services\u2014such as IT services, software development, consulting, marketing, or design\u2014the <\/span><b>place of supply <\/b><span style=\"font-weight: 400;\">is the location of the recipient. This rule covers the majority of SaaS exporters, freelancers, and agencies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you cannot identify the recipient\u2019s location from contracts or records, the law falls back to the supplier\u2019s location, which can immediately disqualify the service from export status.<\/span><\/p>\n<h3><b>How Do Performance-Based Services Change the Place of Supply?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Certain services depend on where the work is physically carried out, not where the client is based:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Section 13(3) applies to services that require physical presence, either of goods or of individuals.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If goods are located in India during the repair service, the place of supply remains India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This holds true even if the client is based overseas.<\/span><\/li>\n<\/ul>\n<h4><b>Services Related to Goods<\/b><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Place of supply is where the goods are physically located at the time of service.<\/span><\/li>\n<\/ul>\n<h4><b>Services Provided to Individuals<\/b><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Place of supply is where the service is actually performed.<\/span><\/li>\n<\/ul>\n<h3><b>What Are the Rules for Intermediary and Banking Services?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Under Section 13(8) of the IGST Act, if you act as an intermediary\u2014such as a broker or agent arranging a supply\u2014or provide specified banking or financial services to account holders, the place of supply shifts to your location in India, not the foreign client\u2019s location.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Because of this shift, many such services do not qualify as exports even when you raise invoices on overseas customers and receive foreign currency.<\/span><\/p>\n<h2><b>What Are the Two Ways to Claim Tax Benefits on Exports?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Exports under GST are treated as <\/span><b>zero-rated supplies<\/b><span style=\"font-weight: 400;\">, which means the tax burden should not stick with the exporter. To achieve this, GST offers two compliance routes. Both lead to tax relief, but they affect cash flow very differently. Choosing the right option can make a visible difference to your working capital and refund timelines.<\/span><\/p>\n<h3><b>LUT Route vs IGST Paid Route \u2014 Quick Comparison<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td><b>Aspect<\/b><\/td>\n<td><b>LUT Route (Without tax)<\/b><\/td>\n<td><b>IGST Paid Route (With tax)<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Tax paid at time of export<\/span><\/td>\n<td><span style=\"font-weight: 400;\">No<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Yes<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Immediate cash outflow<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Nil<\/span><\/td>\n<td><span style=\"font-weight: 400;\">High<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Refund type<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Input tax credit<\/span><\/td>\n<td><span style=\"font-weight: 400;\">IGST paid<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Refund speed<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Faster<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Slower<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Working capital impact<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Minimal<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Strained until refund<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><b>How Does the Letter of Undertaking (LUT) Route Work?<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You must file <\/span><b>Form GST RFD-11<\/b><span style=\"font-weight: 400;\"> on the GST portal before making an export.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You can export goods or services without paying IGST upfront.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You may claim a refund of the input tax credit accumulated on your expenses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This route avoids cash blockage and is therefore preferred by most exporters.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It requires a valid GST registration and proper export compliance.<\/span><\/li>\n<\/ul>\n<h3><b>When Should You Pay IGST and Claim a Refund?<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You pay IGST at the time of making the export.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Then apply for a refund under <\/span><b>Section 54 of the CGST Act<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The refund is processed only after verification by the tax authorities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You must submit proof of foreign payment, such as a Bank Realisation Certificate (BRC) or a Foreign Inward Remittance Certificate (FIRC).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This route is generally used when filing an LUT is not possible or gets delayed.<\/span><\/li>\n<\/ul>\n<div style=\"border-left: 4px solid #0073aa; background: #f0f8ff; padding: 15px; margin: 20px 0; border-radius: 5px;\">\n<p style=\"color: #0073aa; font-size: 18px; margin: 0;\"><strong><span style=\"color: #0073aa;\"><span style=\"font-size: 18px;\">Pro Tip: <\/span><\/span><\/strong><span style=\"color: rgba(0,0,0,0.74); font-size: 19px; font-weight: 400;\">The LUT route lets you export without paying GST upfront, which helps preserve cash and manage working capital better. The IGST route should be used only when you are unable to file an LUT or face delays in doing so.<\/span><\/p>\n<\/div>\n<h2><b>How to Manage Foreign Exchange Realisation for GST Compliance?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">To qualify as an export of services, you must receive payment in <\/span><b>convertible foreign exchange<\/b><span style=\"font-weight: 400;\"> within the time limits prescribed by the RBI. This makes payment tracking critical. The way you receive money affects not just costs and speed, but also how easily you can prove compliance during GST refunds, audits, or LUT verification.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Below is how common payment methods compare from a GST and RBI compliance lens.<\/span><\/p>\n<h3><b>Traditional SWIFT and Wire Transfers<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High intermediary and correspondent bank fees reduce net realisation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>FIRCs<\/b><span style=\"font-weight: 400;\"> often require manual follow-up with banks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Slow settlement can delay GST refund claims and working capital recovery.<\/span><\/li>\n<\/ul>\n<h3><b>Digital Payment Gateways and Wallets<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Easy to collect payments through online checkout, especially for SaaS and consulting.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High transaction and FX conversion fees impact margins.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Multiple small receipts make reconciliation and GST audits harder.<\/span><\/li>\n<\/ul>\n<h3><b>Razorpay MoneySaver Export Account<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Receive payments via local bank transfers from 180+ countries.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Zero forex markup and no hidden charges.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Automated FIRC generation simplifies GST compliance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Faster settlement improves refund timelines.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Saves up to 75% on transfer costs compared to traditional banks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Built for exporters needing clean audit trails and RBI-aligned reporting.<\/span><\/li>\n<\/ul>\n<div style=\"background: #f5faff; border-radius: 14px; padding: 30px; text-align: center; margin: 42px 0; box-shadow: 0 8px 20px rgba(26,115,232,0.08);\">\n<h2 style=\"color: #1a73e8; font-size: 24px; font-weight: bold; margin-bottom: 12px;\"><strong>Simplify International Payments with Razorpay<\/strong><\/h2>\n<p style=\"color: #444; font-size: 16px; max-width: 720px; margin: 0 auto 18px; line-height: 1.6;\"><strong>Collect payments via local transfers, reduce FX and SWIFT costs, and get instant digital FIRC<br \/>\nfor RBI timelines and GST refunds.<\/strong><\/p>\n<p><a style=\"display: inline-block; background: #1a73e8; color: #ffffff; padding: 14px 26px; font-size: 16px; font-weight: bold; border-radius: 10px; text-decoration: none;\" href=\"https:\/\/razorpay.com\/accept-international-payments\/bank-transfers\/?utm_source=blog&amp;amp;utm_medium=referral&amp;amp;utm_campaign=internationalpayments%22%3E%3Cem%3E%3Cstrong%3ERazorpay%E2%80%99s&quot;\">Explore Razorpay\u2019s MoneySaver Export Account<\/a><span style=\"font-size: 19px; background-color: #ffffff;\">\u00a0<\/span><\/p>\n<\/div>\n<h3><b>Comparison of International Payment Methods<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td><b>Criteria<\/b><\/td>\n<td><b>SWIFT Transfers<\/b><\/td>\n<td><b>Digital Wallets<\/b><\/td>\n<td><b>Dedicated Export Account<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Cost efficiency<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Low<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Medium<\/span><\/td>\n<td><span style=\"font-weight: 400;\">High<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Settlement speed<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Slow<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Fast<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Fast<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">FIRC \/ FIRA availability<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Manual<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Limited<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Automated<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">GST audit readiness<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Moderate<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Complex<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Simple<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Best for<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Large one-off payments<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Micro or SaaS receipts<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Regular exporters<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><b>Conclusion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">To qualify as an <\/span><b>export of services under GST<\/b><span style=\"font-weight: 400;\">, you must satisfy all five conditions under Section 2(6) together. Missing even one can turn an export into a taxable inter-State supply. In practice, most disputes arise around the place of supply and foreign exchange realisation, making these the two areas where exporters need the most care.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">GST rules also evolve through circulars and clarifications, especially on intermediary services and the distinct person rule. Staying updated helps you avoid surprises during audits or refund claims. Using specialised export accounts can further reduce effort by streamlining foreign currency receipts, reconciliation, and compliance\u2014letting you focus more on growing global revenue and less on paperwork.<\/span><\/p>\n<h2><b>FAQs<\/b><\/h2>\n<h3><b>Q1. Is GST registration mandatory for the export of services?<\/b><\/h3>\n<p><b>Not immediately.<\/b><span style=\"font-weight: 400;\"> While exports are considered &#8220;inter-state supplies&#8221; (which usually require mandatory registration), service exporters are exempt from registration if their annual aggregate turnover is below <\/span><b>\u20b920 Lakhs<\/b><span style=\"font-weight: 400;\"> (\u20b910 Lakhs in special category states).<\/span><\/p>\n<h3><b>Q2. What is the time limit to receive payment for the export of services?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">As per FEMA guidelines, the foreign currency payment must be realised within <\/span><b>15 months<\/b><span style=\"font-weight: 400;\"> from the date of the invoice.<\/span><\/p>\n<h3><b>Q3. Can I accept payments in Indian Rupees (INR) for service exports to Nepal and Bhutan?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, you can accept payments in Indian Rupees (INR) for service exports to Nepal and Bhutan, as these transactions are generally exempted from the requirement to settle in convertible foreign exchange.<\/span><\/p>\n<h3><b>Q4. What is the difference between an LUT and an IGST refund?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">An LUT lets you export services without paying IGST upfront. The IGST refund route requires you to pay tax first and then claim a refund later.<\/span><\/p>\n<h3><b>Q5. Is a Foreign Inward Remittance Certificate (FIRC) required for GST refunds?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. A FIRC or FIRA is mandatory proof that foreign currency was received in India for the export invoice.<\/span><\/p>\n<h3><b>Q6. How is the &#8216;Place of Supply&#8217; determined for freelance or digital services?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Usually, it is the recipient\u2019s location. But if you act as an intermediary or perform services in India, the place of supply may shift to India.<\/span><\/p>\n<h3><b>Q7. Does a supply between a head office and a foreign branch qualify as an export?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">No. A head office and foreign branch are the same legal entity. Supplies to a separately incorporated foreign subsidiary can qualify as exports.<\/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 registration mandatory for the export of services?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"GST registration is not immediately mandatory. Although exports are treated as inter-state supplies, service exporters are exempt from registration if their annual aggregate turnover is below \u20b920 lakhs (\u20b910 lakhs in special category states).\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the time limit to receive payment for the export of services?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"As per FEMA guidelines, foreign currency payment must be realised within 15 months from the date of the invoice.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Can I accept payments in Indian Rupees (INR) for service exports to Nepal and Bhutan?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes, payments in Indian Rupees are permitted for service exports to Nepal and Bhutan, as these transactions are generally exempt from the requirement to settle in convertible foreign exchange.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the difference between an LUT and an IGST refund?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"An LUT allows you to export services without paying IGST upfront. 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Meeting the<\/p>\n","protected":false},"author":86,"featured_media":26688,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1067],"tags":[],"class_list":{"0":"post-26126","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\/26126","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\/86"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=26126"}],"version-history":[{"count":2,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/26126\/revisions"}],"predecessor-version":[{"id":26128,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/26126\/revisions\/26128"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/26688"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=26126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=26126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=26126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}