GST on Export of Services and LUT Filing Guide

Designers, developers, consultants, content creators and agencies increasingly bill clients in the US, UK, UAE, Europe and elsewhere. Under GST, a genuine export of services is zero-rated: you don’t charge GST to the foreign client, and you can still recover the GST on your inputs. But not every foreign-client service qualifies, and the paperwork, mainly the LUT, has to be in place.

When is it an “export of services”?

Under section 2(6) of the IGST Act, a supply is an export of services only if all five conditions are met:

The supplier is located in India.
The recipient is located outside India.
The place of supply is outside India.
Payment is received in convertible foreign exchange, or in Indian rupees where permitted by the RBI (for example, through Special Rupee Vostro accounts).
The supplier and recipient are not merely establishments of the same person, e.g. an Indian branch billing its own foreign head office.

The place-of-supply trap

For most services (consulting, software development, design, marketing), the place of supply is the location of the recipient, so services to a foreign client qualify. But there are exceptions where the place of supply stays in India:

Intermediary services: if you arrange or facilitate a supply between two parties (e.g. a sourcing agent or sales agent earning commission from a foreign principal), the place of supply is your location, so it is not an export and GST at 18% applies. Note that the GST Council recommended changing this rule, and an amendment has been reported. Check the current position.
Services on goods physically present in India, or services related to immovable property in India
Event and admission services held in India

Zero-rating: two options

Option	How it works	Typical choice
Export under LUT, without paying IGST	File a Letter of Undertaking and invoice without GST. Accumulated ITC can be claimed as a refund	Most freelancers and service exporters
Pay IGST and claim a refund	Charge IGST on the export invoice, pay it, then claim a refund of the IGST paid	Rarely used for services

LUT: how to file (Form GST RFD-11)

When: file it before your first export invoice of the financial year. It is valid for one financial year, so file a fresh LUT each year (for FY 2026-27, ideally by 31 March 2026 or before the first export).
Where: GST portal → Services → User Services → Furnish Letter of Undertaking (LUT).
What you need: the financial year, two independent witnesses (name, address, occupation), and signing with DSC or EVC.
Eligibility: any registered person, unless prosecuted for tax evasion exceeding ₹2.5 crore.
The LUT is accepted automatically on filing. Download the acknowledgement (ARN).

Missed it? Filing the LUT late, before the invoice is issued, is generally accepted. If invoices were already issued without an LUT, take advice, because technically IGST becomes payable on them.

Export invoice: what to mention

The words “SUPPLY MEANT FOR EXPORT OF SERVICES UNDER LUT WITHOUT PAYMENT OF INTEGRATED TAX”
Your LUT ARN and date
The client’s name, address and country
The value in foreign currency (and the INR equivalent at the exchange rate on the invoice date), and the SAC code
Place of supply: “Other Territory” / outside India

Report exports in GSTR-1, Table 6A (exports) with the “WOPAY” (without payment) option, and in GSTR-3B Table 3.1(b) (zero-rated supplies).

Proof of payment

Keep the FIRC / e-BRC or bank advice showing foreign inward remittance and its purpose code. Payments through platforms such as Upwork or PayPal generally qualify, but keep the platform statements too. If payment isn’t received within the time allowed under RBI/FEMA rules, the supply may lose its export status and IGST with interest becomes payable under the LUT terms.

Do freelancers need to register?

Exports count towards the ₹20 lakh threshold (₹10 lakh in special category states).
Below ₹20 lakh: registration is not mandatory, even though exports are treated as inter-state supplies. Inter-state supplies of services are exempt from compulsory registration below the threshold.
Above ₹20 lakh: register, file an LUT, and file GSTR-1 and GSTR-3B (QRMP is fine for most freelancers).
Voluntary registration can make sense if you have significant GST on inputs (laptops, software subscriptions, co-working space) that you want refunded.

Refund of accumulated ITC

Since exports carry no GST, ITC on inputs tends to pile up. You can claim a refund in Form RFD-01, category “Export of services without payment of tax”, within two years of the relevant date. That is generally the date of receipt of payment for services. Attach your invoices, FIRCs and statement of exports.

Frequently asked questions

I’m a freelancer earning ₹12 lakh a year from US clients. Do I need GST?
No. You are below ₹20 lakh and the supplies are services, so registration is not mandatory.

My client is in Dubai but asks me to bill its Indian subsidiary. Is that an export?
No. If the recipient (the contracting party and payer) is in India, it is a domestic supply, and GST applies.

Is income from YouTube or Google AdSense an export?
It is generally treated as an export of services, since the recipient (Google’s foreign entity) is outside India and pays in foreign currency, but the facts matter. Take advice for your specific contract.

Billing clients abroad? Garvita Jain & Co. checks whether your services qualify as exports, files your LUT every year, sets up compliant export invoices and claims ITC refunds. Contact us here, or at contact@garvitajainandco.com or +91 98678 16597.

This article is general information based on the law as of November 2026 and is not professional advice.

Sources

Official

Professional / CA publications

GST on Export of Services and LUT Filing: A Guide for Freelancers and Exporters