GST for freelance service exporters

Canonical summary. Primary research, circular numbers and the SAC table are in research/02-gst-export-of-services.md. Last reviewed: 2026-10-03.

1. Is it an “export of services”? (IGST s.2(6), VERIFIED)

All five conditions must hold:

1. The supplier is located in India.
2. The recipient is located outside India.
3. The place of supply (POS) is outside India.
4. Payment is received in convertible foreign exchange, or in INR where RBI permits. Example: Special Rupee Vostro accounts (Circular 202/14/2023-GST). Payment-aggregator FIRA/e-FIRC settlements are accepted as evidence in practice (REPORTED).
5. Supplier and recipient are not merely establishments of the same person. Circular 161/17/2021-GST: a separately incorporated foreign company is a separate person, so a foreign company the freelancer owns is generally one too; check the establishment rules (Explanation 1 to IGST s.8) and who actually contracts (UNCERTAIN for LLC-type structures; research/02 §1.3).

POS default (s.13(2)): the location of the recipient. POS is India (so the work is NOT an export) when:

• the service is performed on goods physically in India (13(3)(a));
• the service needs the recipient’s physical presence in India (13(3)(b));
• it relates to immovable property in India (13(4));
• it is an event held in India (13(5)).

Intermediary rule removed: s.13(8)(b) was omitted by Finance Act 2026 s.157 with effect from 30 Mar 2026 (VERIFIED, Gazette). Agent, referral or commission services to foreign principals can now be exports. Supplies dated before 30 Mar 2026 stay non-export (POS India).

Not an export:

• working for an Indian agency, aggregator or outsourcing firm (the freelancer’s contract is with the Indian entity, so it is the recipient; Circular 159/15/2021 para 3.5: a sub-contractor supplies the person who sub-contracted it). The reverse, a freelancer hiring an Indian subcontractor, does not by itself change the freelancer’s own supply to a foreign client;
• a client that is the Indian subsidiary or branch of a foreign company;
• a foreign client with a fixed establishment in India receiving the service;
• payment in plain INR without RBI permission.

2. Registration

• Threshold: aggregate turnover above ₹20 lakh in a FY (₹10 lakh in Manipur, Mizoram, Nagaland, Tripura). Export turnover counts (CGST s.2(6), VERIFIED).
• No compulsory registration below the threshold for inter-State service suppliers: Notif. 10/2017-Integrated Tax (13 Oct 2017) (REPORTED text; confirm on CBIC). Watch-out: s.24(iii) (RCM-liable persons, e.g. importing non-OIDAR services for business) technically forces registration (UNCERTAIN in practice).
• Composition scheme is not allowed for exporters (s.10(2A)(b), VERIFIED).
• Apply within 30 days of crossing the threshold. Optional simplified registration under Rule 14A (from 1 Nov 2025, REPORTED).

3. Zero-rating route: LUT (default)

• LUT in Form GST RFD-11, filed before the first export of each FY (Rule 96A). Valid for one FY. Status becomes “Deemed Approved” after 3 working days. Portal path: Services → User Services → Furnish Letter of Undertaking (LUT); needs two witnesses; sign with EVC or DSC (VERIFIED, GSTN tutorial).
• A late LUT can be condoned (Circular 37/11/2018, REPORTED). Product: block LUT-endorsed invoices when no LUT covers the invoice’s FY; nudge every March for the next FY.
• The alternative route (pay IGST and claim a refund) remains available for services (Notif. 01/2023-IT, REPORTED). It is rarely sensible for freelancers.

4. Non-realisation (Rule 96A(1)(b), VERIFIED, as substituted 10 Jul 2024)

If payment is not received within the later of 1 year or the FEMA period (including RBI/AD extensions) from the invoice date, the exporter must pay IGST plus 18% interest within 15 days after that date. With FEMA at 9 months, the GST clock is invoice date + 1 year + 15 days, unless an AD extension runs longer. The FEMA alert (9 months) fires first.

5. Invoice requirements

5.1 GST-registered exporter (Rule 46, VERIFIED)

Mandatory:

• supplier name, address and GSTIN;
• invoice number: ≤ 16 characters, only A–Z a–z 0–9 - /, unique per FY (regex ^[A-Za-z0-9/-]{1,16}$);
• date;
• recipient name and address, address of delivery and country of destination (export proviso);
• HSN/SAC code: digits per Notif. 78/2020-CT (4 up to ₹5 crore AATO, 6 above; REPORTED). Printing all 6 digits always meets it (product default);
• description;
• value;
• taxable value;
• IGST rate and amount (0 under LUT);
• POS “Outside India” (State code 96 “Other Countries” for e-invoice/portal, REPORTED);
• reverse charge “No”;
• signature or DSC (not required for an electronic invoice, Notif. 74/2018).

Endorsement, exact current text (VERIFIED, as substituted by Notif. 17/2017-CT):

SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX

(or …ON PAYMENT OF INTEGRATED TAX for the IGST-paid route). The shorter “SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING…” is the superseded July 2017 wording. Use the full text.

Good practice (REPORTED):

• LUT ARN and FY;
• invoice currency;
• exchange rate used, its source and date, and the INR value;
• client tax ID (VAT/EIN);
• contract or PO reference;
• service period;
• bank or remittance instructions;
• purpose code.

Issue within 30 days of supply (Rule 47, VERIFIED). Service invoices are prepared in duplicate (Rule 48(2)).

Exchange rate (Rule 34(2), VERIFIED): “as per generally accepted accounting principles for the date of time of supply”. Use the spot rate on the time-of-supply date, applied consistently: the RBI/FBIL reference rate or the bank TT rate. (The RBI-reference-rate wording belonged to the original 2017 rule, which was replaced.)

E-invoicing (IRN): only if aggregate turnover exceeded ₹5 crore in any FY since 2017-18. Exports are covered above that threshold (REPORTED). Almost no freelancer is affected; the product runs a check.

5.2 Unregistered freelancer (REPORTED; no statutory format)

Issue a commercial invoice: not a “Tax Invoice”, no GSTIN, no tax lines, no LUT endorsement (s.32(1): an unregistered person must not collect tax).

Include:

• name, address, PAN;
• invoice number and date;
• client name, address, country;
• description and period;
• amount and currency;
• payment terms;
• bank or platform details;
• purpose code;
• the note “Export of services. Supplier not registered under GST.”

The EDF still applies.

5.3 SAC quick map (VERIFIED descriptions, Notif. 11/2017-CT(R) annexure; full table in research/02 §5.3)

The product list (priv/reference_data/sac_codes.json, 47 codes) was extended on 2026-10-11 for creators (998365, 99843x), BPO (998593, 998599), CA clients (99822x, 99823x), legal (998212/3), engineering and R&D (998331/8, 99811x), recruitment (998512) and training (999294); each description checked against the GST Council’s explanatory notes (explanatory_notes_01oct19.pdf). Creator ad revenue’s code is a judgement call (998365 vs online-content codes): UNCERTAIN, see 90 C19. | Work | SAC | |—|—| | Custom software, web or app development | 998314 | | IT consulting and support | 998313 | | Hosting / infra | 998315 | | Other IT n.e.c. (QA, testing) | 998319 | | Management or marketing consulting | 998311 | | Advertising | 998361 | | Market research | 998371 | | Graphic, UI/UX, product design | 998391 | | Translation | 998395 | | Video editing / post-production | 999613 | | Writers, illustrators, composers (authorship) | 999632 | | Online tutoring | 999293 | | Fallback: other professional services n.e.c. (content writing, VA) | 998399 |

Content-writing classification is a judgement call (UNCERTAIN). The user chooses; the product shows a recommended default with its reason.

6. Returns

6.1 NIL returns: when they are and are not allowed (VERIFIED, GSTN)

• Nil GSTR-1 only if there are no outward supplies, including zero-rated supplies, no amendments, no credit or debit notes, and no advances.
• Nil GSTR-3B only if there are no outward supplies, no liability (including RCM) and no ITC.
• ⇒ A month or quarter with any export invoice is NOT NIL. Neither is one with RCM on foreign SaaS or ITC claimed.
• SMS filing: send NIL 3B <GSTIN> <MMYYYY> / NIL R1 <GSTIN> <MMYYYY> to 14409 from the authorised signatory’s registered mobile, then confirm with CNF 3B <code> / CNF R1 <code> (code valid 30 minutes). Quarterly filers use the last month of the quarter. Allowed only on or after the 1st of the following period, with no saved draft and all previous 3Bs filed.
• Product: we cannot send the SMS. We generate the exact text plus an sms:14409?body=… link, only after the eligibility check passes (no invoices, credit notes, advances, RCM or ITC in the period).

7. ITC refund under LUT (Rule 89(4), VERIFIED)

• Refund = zero-rated turnover × Net ITC ÷ adjusted total turnover. Zero-rated services turnover is payments received in the period (realisation-based).
• Net ITC = inputs and input services only. Capital goods (e.g. a capitalised laptop) are excluded.
• Time limit: 2 years from the date of receipt of payment (s.54, Explanation 2(c)).
• 90% provisional refund, risk-based, within 7 days (Rule 91(2), from 1 Oct 2025).
• File via RFD-01 with Statement 3 (invoices with BRC/FIRC). Not worth it below ₹1,000 (s.54(14)).

8. Reverse charge for registered freelancers (VERIFIED)

• Foreign SaaS or foreign subcontractors billed to a GSTIN: the recipient pays IGST 18% under RCM, in cash. Issue a self-invoice within 30 days (Rule 47A). Report in 3.1(d) and claim ITC in 4A(2). That ITC is refundable via Rule 89(4).
• An unregistered person buying OIDAR (SaaS) is a non-taxable online recipient: the foreign vendor pays the tax.

9. Filing integration options (see research/05 §2)

• No public filing API exists. Return filing goes through a GSP (e.g. Quicko/Sandbox, Masters India, Vayana), with easylancing acting as an ASP. The taxpayer must enable API access (6 hours to 30 days) and give an OTP, and each filing requires EVC or DSC. The GSP requires the ASP to hold ISO 27001 (e.g. within 90 days of go-live). Cost is roughly ₹25–35 per return in API calls (benchmark).
• v1 plan: a GSTR-1 Table 6A data export (GSTN offline-tool-compatible JSON and CSV), a GSTR-3B worksheet with the values to type in, and the NIL SMS helper. The user files on the portal.
• v2 plan: ASP integration, with the user’s OTP and EVC on every filing. Never store the GST portal password.

10. Product validations (subset; full list in research/02 §10)

GST-001 invoice number regex and FY uniqueness · GST-002 LUT covers the invoice FY · GST-003 full endorsement text · GST-004 country of destination present · GST-005 issued ≤ 30 days after supply (warning) · GST-006 exchange rate and source stored · GST-007 block NIL if any period activity · GST-008 exports never in IFF · GST-009 turnover meter (warn at ₹15 lakh, act at ₹20 lakh) · GST-010 export classification questionnaire (client location, Indian establishment, in-person work in India, goods in India, intermediary before 30 Mar 2026) · GST-011 RCM detection on foreign expenses · GST-012 unregistered users: commercial invoice template only.

Change log

• 2026-10-05: External audit fixes:
  • condition (v) wording (owned foreign company: “generally” separate, with the establishment check);
  • the subcontracting line disambiguated (working for an Indian firm vs hiring an Indian subcontractor);
  • SAC digits stated per Notif. 78/2020 instead of “always 6”.