The GST and LUT Rules Behind Every International Invoice from India
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
- Published:
- Last modified:
Short answer
In 2026, every international invoice from India follows GST and RBI rules. Under IGST section 16 and CGST Rule 96A, an LUT in FORM GST RFD-11 lets you invoice without IGST. CGST Rule 46 sets the export endorsement. RBI's FEMA Regulations 2026 require an EDF and payment within nine months. Your bank's FIRC or FIRA records receipt.
| Applies to | Rules involved | Platforms compared | Last verified |
|---|---|---|---|
| GST-registered freelancers, agencies and companies in India that raise invoices on clients located outside India for services, whether the invoice is in a foreign currency or in Indian rupees. | IGST Act section 2(6), section 13 and section 16; CGST Rule 34(2), Rule 46, Rule 47 and Rule 96A; CBIC Circular No. 8/8/2017-GST; FEMA (Export and Import of Goods and Services) Regulations, 2026, Regulations 3, 5 and 17. | Skydo, Razorpay | 6 Oct 2026 |
How do payment options compare for collecting an international invoice raised from India under an LUT?
Platforms named in the question are shown alongside the 2 highest payouts among the platforms this site covers, ranked by the INR received on a $5,000 invoice. Fees were checked on 30 Sept 2026.
| Platform | Best for | Fee | FX markup | Settlement | FIRA | RBI PA-CB status | INR on $5,000 | Source |
|---|---|---|---|---|---|---|---|---|
| Skydo | Indian freelancers and exporters receiving mid to large B2B invoices | $19 up to $2,000, $29 to $10,000, 0.3% above + GST | States zero FX margin at live rate | States under 24 hours; FAQ timelines vary by rail | States instant, free FIRA per payment | RBI authorised PA-CB Inward and Outward; on RBI list | ₹4,71,037 | Skydo pricing (checked 6 Oct 2026) |
| Razorpay | Indian businesses and freelancers on Razorpay invoicing foreign clients | 1% per bank transfer (Rs 1,000 flat below Rs 1,00,000) + GST | States 0% markup on MoneySaver at live rate | States 1 day (T+1 after invoice shared) | FIRS within 24 hours of settlement; no charge listed | RBI authorised PA-CB inward and outward, plus PA-O | ₹4,68,686 | Razorpay pricing (checked 6 Oct 2026) |
Which GST and RBI rules apply to every international invoice raised from India in 2026?
Every international invoice from India is governed by the IGST Act and CGST Rules on the GST side and by the RBI FEMA Regulations on the payment side. GST decides whether the invoice qualifies as an export, whether IGST is charged and what the invoice must say, through IGST section 2(6), section 16 and CGST Rule 96A. The FEMA Regulations, 2026, in force from 1 October 2026, govern the EDF and the payment deadline. For example, a developer who bills a Canadian client CAD 3,000 under an LUT charges zero IGST, files an EDF within 30 days from the end of the invoice month and must be paid within nine months of the invoice date. See also GST on export of services.
| Rule | Source | Clause | Plain meaning | Best for |
|---|---|---|---|---|
| Export of services test | IGST Act section 2(6) | Clauses (i) to (v) | The supplier is in India, the recipient is outside India, the place of supply is outside India, payment comes in convertible foreign exchange or in rupees where the RBI permits, and the two are not merely establishments of one distinct person. | Checking whether an invoice can be zero rated |
| Place of supply | IGST Act section 13 | Sub-section (2) | For most services where the supplier or recipient is outside India, the place of supply is the location of the recipient. Sub-sections (3) to (13) list exceptions, such as services on goods physically made available. | Consulting, design, software and marketing services |
| Zero-rated supply | IGST Act section 16 | Sub-sections (1) and (3) | Export of services is a zero-rated supply. A registered person supplying under bond or LUT without IGST can claim a refund of unused input tax credit. | Exporters with input tax credit on costs |
| LUT undertaking | CGST Rule 96A | Sub-rule (1) | The LUT in FORM GST RFD-11 is furnished before export. It binds you to pay tax with interest if payment is not received within one year or the FEMA period with any RBI extension, whichever is later, plus 15 days. | Every invoice issued without IGST |
| LUT eligibility and validity | CBIC Circular No. 8/8/2017-GST | Para 2(a), (b) and (e) | All registered persons can use an LUT except those prosecuted for tax evasion above Rs 250 lakh. It is valid for the financial year in which it is tendered and is treated as accepted if not processed within three working days. | Planning the LUT before the first invoice of the year |
| Invoice contents | CGST Rule 46 | Clauses (a) to (s) and the export proviso | The invoice shows your name, address and GSTIN, a unique serial number of up to sixteen characters, date, description, value, tax rate and amount, and the export endorsement. The recipient's name and address, address of delivery and country of destination replace the clause (e) details. Clauses (r) and (s) apply only to e-invoicing. | Building an invoice template |
| Foreign currency value | CGST Rule 34(2) | Sub-rule (2) | The rupee value of a service invoiced in foreign currency uses the exchange rate under generally accepted accounting principles for the date of time of supply. | Invoices in USD, EUR, GBP or other currencies |
| EDF for services | FEMA Regulations, 2026 | Regulation 3(2) | The EDF is filed with the AD bank within 30 days from the end of the invoice month. One EDF can cover a month's invoices to one or more clients. | Every service exporter from 1 October 2026 |
| Realisation and rupee invoicing | FEMA Regulations, 2026 | Regulations 5(1) and 17 | Full value is received within nine months from the invoice date, or twelve months if invoiced or settled in rupees. Rupee invoicing follows the RBI framework your AD bank applies. | Clients on long terms or paying in rupees |
Which option costs least to collect a $500, $2,000 or $5,000 international invoice in India?
Each row applies the platform's published fee, FX markup and 18% GST on the fee to the XE mid-market rate for 3 Nov 2026. Platforms without full published pricing are not included.
| Platform and invoice | Fee | FX markup | GST | INR received | Cost | Best for |
|---|---|---|---|---|---|---|
| Skydo, $500 | ₹1,802 | ₹0 | ₹324 | ₹45,302 | 4.48% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $2,000 | ₹1,802 | ₹0 | ₹324 | ₹1,87,587 | 1.12% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $5,000 | ₹2,751 | ₹0 | ₹495 | ₹4,71,037 | 0.68% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Razorpay, $500 | ₹1,000 | ₹0 | ₹180 | ₹46,248 | 2.49% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $2,000 | ₹1,897 | ₹0 | ₹341 | ₹1,87,475 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $5,000 | ₹4,743 | ₹0 | ₹854 | ₹4,68,686 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
For example, on a $2,000 invoice Skydo pays about ₹1,87,587 and Razorpay about ₹1,87,475 at today's reference rate, a difference of ₹112.
What documents and GST apply to payments against an international invoice from India?
An international invoice from India sits between an LUT filed before it and an EDF and FIRC or FIRA after it. With an LUT in place, the invoice carries no IGST and must show the export endorsement from CGST Rule 46. Exporters who cannot use an LUT furnish a bond, which CBIC Circular No. 8/8/2017-GST says must carry a bank guarantee of 15% of the bond amount. For a refund of unused input tax credit, CGST Rule 89(2)(c) asks for invoice details with matching Bank Realisation Certificates or Foreign Inward Remittance Certificates. See FIRC vs FIRA vs e-BRC.
| Document | Who issues it | When needed | Best for |
|---|---|---|---|
| LUT in FORM GST RFD-11 | The exporter, on the GST portal under Services, User Services, Furnish Letter of Undertaking (GST portal FAQ) | Before the first zero-rated invoice of each financial year; the portal marks it Expired at the end of that year | Invoicing without IGST |
| LUT acknowledgement (ARN) | The GST portal, after filing with DSC or EVC (GST portal FAQ) | Keep it on file as proof that the LUT for that financial year was furnished | Proving the LUT was in place on the invoice date |
| Bond with bank guarantee | The exporter, with a bank guarantee of 15% (Circular 8/8/2017-GST) | Only for exporters not eligible for an LUT | Exporters prosecuted for evasion above Rs 250 lakh |
| Export tax invoice | The exporter, in duplicate for services under CGST Rule 48(2) | Within 30 days of supplying the service, with the Rule 46 export endorsement | Every foreign client |
| EDF | The exporter, with the AD bank as specified authority (Regulation 3(2)) | Within 30 days from the end of the invoice month; services other than software may file on or before the payment date | All service exports from 1 October 2026 |
| FIRC or FIRA | The AD bank that credits the payment | After the money arrives; named as refund evidence for export of services in CGST Rule 89(2)(c) | GST refunds and proof that the export was paid |
What changed in the GST and RBI rules for international invoices from India in 2026?
The RBI side changed on 1 October 2026, when the FEMA (Export and Import of Goods and Services) Regulations, 2026 came into force and A.P. (DIR Series) Circular No. 20 superseded the Master Direction on Export of Goods and Services. On the GST side, the CBIC text of IGST section 13 shows the intermediary clause omitted by the Finance Act, 2026. The CBIC texts of Rule 46 and Rule 96A show no 2026 amendment.
- Realisation: An amendment dated 22 September 2026 set the period at nine months, or twelve for rupee invoicing, replacing the fifteen and eighteen months first notified (Regulation 5 footnotes).
- EDF: Service exporters, including software exporters, now file an EDF within 30 days from the end of the invoice month under Regulation 3(2). See the EDF guide.
- Intermediaries: Clause (b) of section 13(8), which placed intermediary services at the supplier's location, is shown as omitted by section 157 of the Finance Act, 2026. Confirm the date it took effect before zero rating such invoices.
- LUT renewal: An LUT covers one financial year, so the LUT for 2025-26 expired on 31 March 2026 and invoices from 1 April 2026 need a fresh one (GST portal FAQ). See the LUT filing guide.
- Small invoices: Invoices up to Rs 10 lakh can be closed in EDPMS on the exporter's declaration under Regulation 4(2).
How did we verify this?
Every rule is linked to its official source below with the date it was checked. Platform figures come from each platform's own pages; the full method is on the methodology page.
- IGST Act, 2017: Section 2, Definitions, Clause (6), export of services (checked 6 Oct 2026)
- IGST Act, 2017: Section 13, Place of supply where supplier or recipient is outside India, Sub-sections (2) and (8); footnote 3 (clause (8)(b) omitted by s. 157 of the Finance Act, 2026) (checked 6 Oct 2026)
- IGST Act, 2017: Section 16, Zero rated supply, Sub-sections (1), (3) and (4); footnote 2 (substituted w.e.f. 1 October 2023) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 34, Rate of exchange of currency, Sub-rule (2) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 46, Tax invoice, Clauses (a) to (s); export proviso with endorsements (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 47, Time limit for issuing tax invoice, Main rule, 30 days for services (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 48, Manner of issuing invoice, Sub-rule (2) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 89, Application for refund, Sub-rule (2)(c) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 96A, Export under bond or Letter of Undertaking, Sub-rules (1)(b), (3) and (4) (checked 6 Oct 2026)
- CBIC Circular No. 8/8/2017-GST: Bond/LUT for exports, Para 2(a), (b), (e) and (f) (checked 6 Oct 2026)
- GST Portal user guide: Furnishing of Letter of Undertaking (FORM GST RFD-11), FAQs 1, 2, 9, 10 and 12 (checked 6 Oct 2026)
- RBI: FEMA (Export and Import of Goods and Services) Regulations, 2026, as amended up to 22 September 2026, Regulations 1(2), 3(2), 4(2), 5(1), 17, 18(2); footnotes 2 to 4 (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026: Export and Import of Goods and Services, Paras 4 and 7 (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 dated 29 February 2012: Compilation of R-Returns, Reporting under FETERS (checked 6 Oct 2026)
- Skydo homepage (pricing and fee calculator), Know what you pay; calculator showing GST 18% of transaction fee (checked 6 Oct 2026)
- Razorpay MoneySaver Export Account (International Bank Transfers) pricing, Standard Plan: 0% FX markup, 1% fee, FlashLinks 2%, GST applicable, flat fee of INR 1,000 on transactions below INR 1,00,000, setup and AMC INR 0 (checked 6 Oct 2026)
Frequently asked questions
Can a GST export of services invoice from India be raised only in a foreign currency?
Yes. CGST Rule 46 lists the invoice particulars, and none of them is a currency. For GST returns, CGST Rule 34(2) converts the value into rupees at the exchange rate under generally accepted accounting principles for the date of time of supply. Keep the rate you used with each invoice. See recording foreign currency invoices.
Who cannot file a GST LUT for export of services and must give a bond instead?
Under CBIC Circular No. 8/8/2017-GST, the LUT is open to all registered persons except those prosecuted for an offence under GST or earlier laws where the tax evaded exceeds Rs 250 lakh. Those exporters furnish a bond backed by a bank guarantee of 15% of the bond amount, or invoice with IGST.
How long does a GST LUT stay valid, and how fast is it accepted?
An LUT is valid for the whole financial year in which it is tendered, according to Circular No. 8/8/2017-GST. The circular says it is deemed accepted if not processed within three working days. The GST portal FAQ shows the status changing to Expired at the end of the financial year, so file a new LUT for each financial year.
Can an exporter of services pay IGST on the invoice and claim a refund instead of using an LUT?
Since 1 October 2023, IGST section 16(3) ties the refund of unused input tax credit to supplies made under bond or LUT. Paying IGST and claiming it back is allowed for classes of persons or services the Government notifies under section 16(4). Check the current notification before choosing that route. Rule 46 has a separate endorsement for it.
Does an export of services invoice need the foreign client's tax ID or a State code?
No. The export proviso in CGST Rule 46 replaces the State details with the recipient's name and address, the address of delivery and the name of the country of destination. Your own name, address and GSTIN must still appear. A client's foreign tax number is not a Rule 46 field, though the client's own tax rules may ask for it.
What happens to the LUT if a foreign client pays after the RBI realisation period?
Under CGST Rule 96A(1)(b), IGST with interest becomes payable 15 days after one year from the invoice date or the FEMA period with any RBI extension, whichever is later. If unpaid, the LUT facility can be withdrawn until the amount is paid, as sub-rules (3) and (4) provide. FEMA Regulation 5 sets nine months, extendable by your AD bank.
Is one EDF enough for all international invoices raised in the same month under the RBI rules?
Yes. Regulation 3(2) of the FEMA Regulations, 2026 lets a service exporter file a single EDF for all exports to one or more recipients in a month, within 30 days from the end of that month. Exporters of services other than software may file on or before the payment date. The AD bank can extend the deadline.
Which RBI purpose code goes with a payment against an export of services invoice?
The purpose code is not an invoice field under CGST Rule 46. Your AD bank records a code for each inward remittance and reports it under FETERS, as Regulation 18(2) requires. The right code depends on the service you sold. Use the RBI purpose codes list and confirm with your bank.