GST Registration Threshold and LUT: How to Get Paid Internationally Without the Headache
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
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Short answer
In 2026, the GST registration threshold for service exporters is Rs 20 lakh of aggregate turnover, or Rs 10 lakh in special category States, under CGST section 22. Export income counts. Only a registered person can file an LUT under CGST Rule 96A and invoice without IGST. RBI FEMA Regulations 2026 require an EDF and nine-month payment.
| Applies to | Rules involved | Platforms compared | Last verified |
|---|---|---|---|
| Freelancers, consultants, agencies and small companies in India that sell services to clients outside India and want to know when GST registration starts and how to invoice without IGST. | CGST Act section 2(6), section 22, section 24 and section 25; IGST Act section 2(6), section 7(5) and section 16; CGST Rule 46, Rule 89 and Rule 96A; CBIC Circular No. 8/8/2017-GST; FEMA (Export and Import of Goods and Services) Regulations, 2026. | Skydo, Razorpay | 6 Oct 2026 |
How do payment options compare for Indian service exporters collecting foreign invoices under the GST threshold or 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 | ₹4,69,828 | 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 | ₹4,67,483 | Razorpay pricing (checked 6 Oct 2026) |
Which GST and RBI rules decide GST registration and the LUT for Indian service exporters in 2026?
Two GST questions come first: whether your turnover crosses the registration threshold, and whether you hold an LUT once registered. CGST section 22 sets the threshold at Rs 20 lakh of aggregate turnover, and the definition in CGST section 2(6) includes exports. Once registered, an LUT under CGST Rule 96A lets you invoice foreign clients without IGST. The FEMA Regulations, 2026 then govern the EDF and the payment deadline. Say a designer in Pune earns Rs 24 lakh a year, all from US clients: the export income alone crosses Rs 20 lakh, so she registers within 30 days and files an LUT before her next invoice. See GST registration for service exporters.
| Rule | Source | Clause | Plain meaning | Best for |
|---|---|---|---|---|
| Registration threshold | CGST Act section 22 | Sub-section (1) and first proviso | A supplier must register once aggregate turnover in a financial year exceeds Rs 20 lakh, or Rs 10 lakh in special category States. A higher limit of up to Rs 40 lakh can be notified only for suppliers engaged exclusively in goods. | Freelancers deciding when to register |
| Aggregate turnover | CGST Act section 2(6) | Clause (6) | Aggregate turnover includes taxable supplies, exempt supplies and exports of goods or services, computed on an all India basis for the same PAN, excluding GST itself. | Exporters who assume foreign income does not count |
| Exports are inter-State | IGST Act section 7(5) | Clause (a) | A supply where the supplier is in India and the place of supply is outside India is treated as an inter-State supply. | Understanding why IGST, not CGST and SGST, applies |
| Compulsory registration | CGST Act section 24 | Clause (i) | Section 24(i) lists persons making any inter-State taxable supply among those who must register, notwithstanding section 22(1). Exemption notifications can change this for some service suppliers, so confirm with a GST practitioner before staying unregistered below the threshold. | Exporters below Rs 20 lakh |
| Time to register | CGST Act section 25 | Sub-sections (1) and (3) | Apply within 30 days of becoming liable. A person who is not liable may still register voluntarily, and all registered-person rules then apply. | Exporters crossing the threshold mid-year |
| Export of services test | IGST Act section 2(6) | Clauses (i) to (v) | Supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange or rupees where the RBI permits, and not two establishments of one person. | Checking whether an invoice is an export |
| Zero rating and LUT | IGST Act section 16 and CGST Rule 96A | Section 16(1) and (3); Rule 96A(1)(b) | Exports are zero rated. A registered person can supply without IGST under an LUT in FORM GST RFD-11, and must pay tax with interest if payment is not received within one year or the FEMA period, whichever is later, plus 15 days. | Registered exporters invoicing without IGST |
| Realisation and EDF | FEMA Regulations, 2026 | Regulations 3(2) and 5(1) | File an EDF within 30 days from the end of the invoice month and receive full value within nine months of the invoice date, or twelve months if invoiced or settled in rupees. | Every service exporter from 1 October 2026 |
Which option costs least to receive a $500, $2,000 or $5,000 export payment 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 4 Nov 2026. Platforms without full published pricing are not included.
| Platform and invoice | Fee | FX markup | GST | INR received | Cost | Best for |
|---|---|---|---|---|---|---|
| Skydo, $500 | ₹1,798 | ₹0 | ₹324 | ₹45,185 | 4.48% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $2,000 | ₹1,798 | ₹0 | ₹324 | ₹1,87,105 | 1.12% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $5,000 | ₹2,744 | ₹0 | ₹494 | ₹4,69,828 | 0.68% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Razorpay, $500 | ₹1,000 | ₹0 | ₹180 | ₹46,127 | 2.49% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $2,000 | ₹1,892 | ₹0 | ₹341 | ₹1,86,993 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $5,000 | ₹4,731 | ₹0 | ₹852 | ₹4,67,483 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
For example, on a $2,000 invoice Skydo pays about ₹1,87,105 and Razorpay about ₹1,86,993 at today's reference rate, a difference of ₹112.
What documents and GST apply to international payments for an Indian service exporter, registered or not?
A registered exporter files an LUT before the first zero-rated invoice, issues a GST invoice with the export endorsement, files an EDF and keeps the bank's FIRC or FIRA. The endorsement wording comes from CGST Rule 46. An unregistered exporter below the threshold issues no GST invoice and cannot file an LUT, because Rule 96A applies only to registered persons. The RBI paperwork under the FEMA Regulations, 2026 applies either way. See FIRC vs FIRA vs e-BRC.
| Document | Who issues it | When needed | Best for |
|---|---|---|---|
| GST registration (GSTIN) | The GST portal, on your application under CGST section 25 | Within 30 days of aggregate turnover crossing the threshold, or earlier if you register voluntarily | Exporters at or near Rs 20 lakh |
| 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; status changes to Expired at year end | Registered exporters invoicing without IGST |
| Export invoice with endorsement | The exporter, under CGST Rule 46 | Each invoice, marked as supply meant for export under bond or LUT without payment of integrated tax | Every foreign client of a registered exporter |
| EDF | The exporter, filed with the AD bank under Regulation 3(2) | Within 30 days from the end of the invoice month; one EDF can cover a month's exports | All service exporters from 1 October 2026 |
| FIRC or FIRA | The AD bank that credits the payment | After each payment arrives; CGST Rule 89(2)(c) asks for Bank Realisation Certificates or Foreign Inward Remittance Certificates for an export of services refund | GST refunds and proof of realisation |
What changed in the GST and RBI rules for Indian service exporters this year?
The RBI rules 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 earlier export circulars. The GST threshold in CGST section 22 lists no amendment after 2020 in the CBIC text, and the LUT in Rule 96A still runs for one financial year at a time.
- EDF: Service exporters now file an EDF within 30 days from the end of the invoice month under Regulation 3(2). See the EDF guide.
- Realisation: An amendment dated 22 September 2026 set the period at nine months, or twelve months for rupee invoicing, replacing the longer periods first notified (Regulation 5).
- Small invoices: Invoices up to Rs 10 lakh can be closed in EDPMS on the exporter's declaration under Regulation 4(2).
- LUT renewal: The LUT for 2025-26 expired on 31 March 2026, so invoices from 1 April 2026 need a fresh LUT (GST portal FAQ). See the LUT filing guide.
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.
- CGST Act, 2017: Section 2, Definitions, Clause (6), aggregate turnover (checked 6 Oct 2026)
- CGST Act, 2017: Section 22, Persons liable for registration, Sub-section (1), provisos and Explanation (iii) (checked 6 Oct 2026)
- CGST Act, 2017: Section 24, Compulsory registration in certain cases, Clause (i) (checked 6 Oct 2026)
- CGST Act, 2017: Section 25, Procedure for registration, Sub-sections (1) and (3) (checked 6 Oct 2026)
- IGST Act, 2017: Section 2, Definitions, Clause (6), export of services (checked 6 Oct 2026)
- IGST Act, 2017: Section 7, Inter-State supply, Sub-section (5)(a) (checked 6 Oct 2026)
- IGST Act, 2017: Section 16, Zero rated supply, Sub-sections (1) and (3) (checked 6 Oct 2026)
- CGST Rules, 2017: Rule 46, Tax invoice, Export proviso and endorsement (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-rule (1)(b) (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 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), 18(2) (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026: Export and Import of Goods and Services (checked 6 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 dated 29 February 2012: 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
Does export of services income count towards the GST registration threshold of Rs 20 lakh in India?
Yes. CGST section 2(6) defines aggregate turnover to include exports of goods or services, alongside taxable and exempt supplies, on an all India basis for the same PAN. So foreign client income counts towards the Rs 20 lakh limit in section 22, even though the export itself carries no GST under an LUT. See GST registration for freelancers.
What is the GST registration threshold for service exporters in special category States?
The first proviso to CGST section 22(1) sets Rs 10 lakh for suppliers in special category States, which the Government may raise up to Rs 20 lakh at a State's request. The explanation to section 22 excludes Jammu and Kashmir, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from that group, so Rs 20 lakh applies there.
Can an unregistered freelancer file a GST LUT for zero-rated export of services?
No. CGST Rule 96A and the GST portal FAQ limit the LUT to registered persons, because FORM GST RFD-11 is filed from a GSTIN login. A freelancer below the threshold who is not registered issues no GST invoice. Anyone who wants an LUT can first register voluntarily under CGST section 25(3).
Is export of services an inter-State supply that forces GST registration under section 24?
IGST section 7(5)(a) treats a supply from India with a place of supply outside India as inter-State, and CGST section 24(i) requires registration for inter-State taxable supply. Whether a notified exemption lets small service exporters stay unregistered below the threshold is a point to confirm with a GST practitioner before relying on it.
How long after crossing the GST threshold must an exporter apply for GST registration?
Within 30 days. CGST section 25(1) requires every person liable under section 22 or 24 to apply in each State or Union territory where liable, within thirty days from the date liability arises. For example, if export income crosses Rs 20 lakh on 15 November, the application is due by 15 December.
Does a GST LUT need to be filed again every financial year for zero-rated services?
Yes. CBIC Circular No. 8/8/2017-GST says an LUT is valid for the whole financial year in which it is tendered, and 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 year. See what an LUT is.
What happens under the LUT if a foreign client pays late or never pays for exported services?
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. Regulation 5 of the FEMA Regulations, 2026 sets nine months, and your AD bank may extend it. Payment must arrive in foreign exchange or permitted rupees.
Which RBI purpose code and documents does the bank need for an export of services payment?
Your AD bank records a purpose code for each inward remittance and reports it under FETERS, as Regulation 18(2) requires. The code depends on the service sold. Keep the FIRC or FIRA the bank issues. CGST Rule 89(2)(c) asks for Foreign Inward Remittance Certificates or Bank Realisation Certificates for a refund. See the RBI purpose codes list.