How Does GST Apply to Export of Services from India?

A zero-rated supply is a supply on which no output GST is finally borne, while input tax credit stays available. Export of goods or services is the first category of zero-rated supply listed in section 16(1) of the IGST Act.

• Credit kept: Credit of input tax may be availed for making zero-rated supplies, even if the supply is an exempt supply, subject to section 17(5) of the CGST Act (IGST Act, section 16(2)).
• Refund route: A registered person making zero-rated supplies under bond or LUT, without paying IGST, can claim a refund of unutilised input tax credit under section 54 of the CGST Act (IGST Act, section 16(3)).
• Inter-State: A supply where the supplier is in India and the place of supply is outside India is treated as inter-State, so the tax involved is IGST, not CGST and SGST (IGST Act, section 7(5)(a)).
• Exempt differs: An exempt supply carries no GST but usually blocks related input tax credit. Zero rating keeps the credit, which is why the export conditions matter.

For the term itself, see what is zero-rated supply. For how the GST meaning of export differs from FEMA, see export of services under FEMA vs GST.

A supply of services qualifies as export only when all five conditions in section 2(6) of the IGST Act are met. If any one fails, the supply is treated as a taxable supply in the usual way and GST may be payable.

You export services without paying IGST by furnishing a Letter of Undertaking (LUT) in Form GST RFD-11 before export, then issuing invoices with the LUT endorsement. CGST Rule 96A(1) requires the bond or LUT prior to export. The alternative is to pay IGST and claim it back, where the law allows.

1. Confirm that each contract meets all five conditions in section 2(6) of the IGST Act, especially the place of supply rule in section 13.
2. Check whether you need GST registration at all; see GST registration for freelancers exporting services.
3. File an LUT in Form GST RFD-11 on the GST portal for the financial year before the first export invoice; see how to file an LUT on the GST portal.
4. Issue each export invoice with the Rule 46 endorsement for supplies under bond or LUT, plus the recipient's name, address and country of destination.
5. Report the export invoices in your GST returns for the tax period in which they are issued.
6. Receive payment in convertible foreign exchange, or in rupees where RBI permits, and keep the bank's remittance certificate for each invoice.
7. If unused input tax credit builds up, apply for a refund in Form GST RFD-01 under CGST Rule 89.

An exporter of services needs an LUT acknowledgement, export invoices with the correct endorsement, and proof of payment for each invoice. CGST Rule 89(2)(c) asks refund applicants for a statement of invoices with the relevant Bank Realisation Certificates or Foreign Inward Remittance Certificates.

If payment is not received within the Rule 96A window, the exporter must pay the tax due with interest. The window is fifteen days after one year from the invoice date, or after the FEMA period with any RBI-permitted extension, whichever is later (Rule 96A(1)(b)).

• Tax and interest: The tax due is payable along with interest under section 50(1) of the CGST Act, as stated in Rule 96A(1).
• LUT withdrawn: If the amount is not paid, the LUT facility is withdrawn and the amount is recovered under section 79 (Rule 96A(3)).
• Interim exports: While the facility is withdrawn, exports must be on payment of IGST or under a bond with bank guarantee (Circular 8/8/2017-GST, para 2(b)).
• FEMA period: From 1 October 2026, services export value must be realised within nine months from the invoice date, or twelve months if invoiced or settled in rupees, and the AD bank may extend it (FEMA Regulation 5(1)).
• Refund impact: Payments not received do not count in the turnover of zero-rated services for the refund formula, which uses payments received during the period (Rule 89(4)(D)).

Pay the amount due with interest; Rule 96A(4) restores the LUT facility immediately on payment. If the delay is genuine, ask your AD bank about an extension of the realisation period; see extension of export realisation period.

Under an LUT, GST on export of services is calculated as zero. Say a designer invoices a foreign client Rs 5,00,000 (hypothetical) and has Rs 30,000 of input tax credit in the period, with no domestic sales. Under LUT, IGST charged is nil and the Rs 30,000 can be claimed as a refund. Under Rule 89(4), the maximum refund is zero-rated turnover multiplied by Net ITC and divided by adjusted total turnover: Rs 5,00,000 x Rs 30,000 / Rs 5,00,000 = Rs 30,000. Under the IGST-paid route, if it is open to you and the rate for your service were 18% (assumed for this example), you would pay Rs 90,000 of IGST and then claim it back. The rate that applies depends on the rate notification for your service.

• No LUT: Issuing April export invoices before filing the new financial year's LUT, even though Rule 96A requires it prior to export.
• Wrong endorsement: Leaving out the Rule 46 endorsement, or using the IGST-paid wording on an LUT invoice.
• Place of supply: Assuming every service to a foreign client is an export, without checking the special rules in section 13(3) to 13(13).
• Branch billing: Treating services billed to your own foreign branch as exports, which Circular 161/17/2021-GST says are supplies between distinct establishments.
• Missing certificates: Not collecting a bank remittance certificate for each invoice, which Rule 89 asks for in a refund claim.
• Ignoring 16(4): Choosing the IGST-paid route without checking whether your class of persons or services is notified under section 16(4).

Every rule, deadline and form on this page is linked to its official source, checked on the dates below.

1. Integrated Goods and Services Tax Act, 2017: Section 2 (Definitions), Section 2(6) export of services, conditions (i) to (v); section 2(13) intermediary (checked 9 Oct 2026)
2. Integrated Goods and Services Tax Act, 2017: Section 7 (Inter-State supply), Section 7(5)(a) (checked 9 Oct 2026)
3. Integrated Goods and Services Tax Act, 2017: Section 13 (Place of supply where supplier or recipient is outside India), Sub-sections (2) to (13); footnote 3 on omission of clause (8)(b) by section 157 of the Finance Act, 2026 (checked 9 Oct 2026)
4. Integrated Goods and Services Tax Act, 2017: Section 16 (Zero rated supply), Sub-sections (1) to (4); footnotes on Finance Act, 2021 substitution in force from 1 October 2023 (Notification 27/2023-CT) (checked 9 Oct 2026)
5. Central Goods and Services Tax Rules, 2017: Rule 96A (Export of goods or services under bond or Letter of Undertaking), Sub-rules (1)(b), (3) and (4) (checked 9 Oct 2026)
6. Central Goods and Services Tax Rules, 2017: Rule 46 (Tax invoice), Second proviso: endorsement for export invoices and recipient details (checked 9 Oct 2026)
7. Central Goods and Services Tax Rules, 2017: Rule 89 (Application for refund), Sub-rules (1), (2)(c) and (4) including definition (D) (checked 9 Oct 2026)
8. Central Goods and Services Tax Rules, 2017: Rule 34 (Rate of exchange for determination of value), Sub-rule (2) (checked 9 Oct 2026)
9. CBIC Circular No. 8/8/2017-GST: Clarification on issues related to furnishing of Bond/LUT for exports, 4 October 2017, Paras 2(a), 2(b) and 2(k) (checked 9 Oct 2026)
10. CBIC Circular No. 161/17/2021-GST: Clarification relating to export of services, condition (v) of section 2(6) of the IGST Act, 20 September 2021, Paras 4.3, 5.1 and 5.2 (checked 9 Oct 2026)
11. CBIC Circular No. 78/52/2018-GST: Clarification on export of services under GST, 31 December 2018, Issue 1 and illustration (checked 9 Oct 2026)
12. Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, FEMA 23(R)/2026-RB, as amended by FEMA 23(R)/(1)/2026-RB, Regulation 5(1)(a) and provisos (checked 9 Oct 2026)