What Is Export of Services?

Export of services is a GST term. A service counts as an export only when all five conditions in the law are met together. The supplier must be in India, the client must be outside India, the place of supply must be outside India, the payment must come in convertible foreign exchange (or Indian rupees where RBI permits), and the two parties must not be mere branches of the same person. If one condition fails, the supply may be taxed like a domestic service. Exports are zero-rated, which means no net GST is borne on them. The test is applied to each supply, not to the business as a whole. A freelancer may have some exports and some domestic clients.

For example, a freelance designer in Pune designs a logo for a company in Spain and is paid in euros into an Indian bank account. The designer is in India, the client is outside India, the place of supply is the client's location, and payment came in foreign exchange. All conditions are met, so this is an export of services.

• GST: Export of services is a zero-rated supply under section 16(1). The exporter can supply under a LUT without paying IGST and claim a refund of unutilised input tax credit. Paying IGST and claiming a refund is open only to classes the government notifies under section 16(4).
• Payment condition: Section 2(6)(iv) requires receipt in convertible foreign exchange or in Indian rupees wherever permitted by RBI. Payment through a route that does not meet this can weaken the claim.
• Bank compliance: Your AD bank records the receipt with a purpose code. Keep the invoice and payment details consistent so the bank can tie the receipt to the export.
• Income tax: This definition belongs to GST. Income tax treats foreign income under its own rules, so ask your tax adviser separately.

A supply qualifies when it passes each condition of the definition. Checking them one by one shows whether a particular invoice is an export.

1. Confirm that you, the supplier, are located in India.
2. Confirm that your client is located outside India.
3. Confirm that the place of supply is outside India under section 13 of the IGST Act.
4. Confirm that payment is received in convertible foreign exchange or in rupees where RBI permits.
5. Confirm that you and the client are not merely establishments of a distinct person.
6. If all five hold, treat the invoice as zero-rated.

Test the invoice against the five conditions in section 2(6). Use clearly hypothetical facts to see how it works.

1. Say a consultant in Chennai invoices a company in Singapore USD 1,000 for advice.
2. Supplier located in India: yes. Recipient located outside India: yes.
3. Place of supply: for most services it is the recipient's location, so it is outside India.
4. Payment: USD 1,000 arrives through the bank in foreign exchange: yes.
5. Distinct person: the client is an independent company: yes. The supply is an export of services.
6. If the client instead asked for payment from an Indian account in rupees without RBI permission, the payment condition may fail. Ask your tax adviser.

• Any foreign client: A foreign client alone does not make an export. All five conditions apply, including place of supply and payment.
• No GST invoice: Exports still need a proper tax invoice if you are registered. The rate is zero rather than the invoice being optional.
• Registration: Export of services is a type of supply. Whether you must register for GST is a separate question that depends on your own facts.
• Same as FEMA: The GST definition and the FEMA treatment of service exports are separate. See the FEMA and GST definitions compared.

• Zero-rated supply: A supply on which no net GST is borne, which includes export of services.
• Place of supply: The location treated as the place where a service is supplied.
• LUT: An undertaking that lets an exporter supply without paying IGST.
• IGST refund: A refund of IGST paid on zero-rated supplies.
• RBI purpose code: The code that describes the reason for a foreign payment.

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

1. IGST Act, 2017, Section 2, Section 2(6) (checked 9 Oct 2026)
2. IGST Act, 2017, Section 13, Section 13(2) (checked 9 Oct 2026)
3. IGST Act, 2017, Section 16, Section 16(1), (3), (4) (checked 9 Oct 2026)