Invoicing clients outside India: export of services, LUT and zero-rated GST

The short answer. Work for a client outside India is an export of services when five conditions are met, the main ones being that the client is abroad and you are paid in foreign currency. Exports are zero rated: if you are registered, file a Letter of Undertaking (LUT) on the GST portal once each financial year and you can invoice without GST. The invoice has to carry a set declaration. From 1 October 2026, the money has to reach India within 9 months of the invoice date.

When is it an export of services?

Section 2(6) of the IGST Act sets five conditions, and all five must hold:

1. You, the supplier, are located in India.
2. The client is located outside India.
3. The place of supply is outside India.
4. You are paid in convertible foreign exchange, or in Indian rupees where the RBI allows it.
5. You and the client are not just two offices of the same business. An Indian branch billing its own head office abroad does not count.

On 8 October 2026 the GST Council recommended removing the fifth condition so that services to a foreign office or branch can count as exports. That is a recommendation, not law yet. It takes effect only when the Act is amended.

Where is the place of supply?

For most remote work the answer is simple. When either you or the client is outside India, the place of supply is the client's location. So software, design, marketing, consulting and writing done for a client abroad has its place of supply outside India.

The exceptions are services that happen in a physical place:

• Services that need the client to be physically present, such as a photoshoot or a workshop in India.
• Services tied to a building or land, such as architecture or interior design for a property in India.
• Events held in India.

For these, the place of supply is where the work is done. A wedding shoot in Goa for a couple who live in Dubai is not an export.

Intermediaries can now export too. Until March 2026, an "intermediary", such as an agency that arranges services for a foreign client from third parties on commission, had its place of supply in India and could not export. The Finance Act, 2026 removed that rule, so intermediaries now follow the client's location like everyone else.

Do you need to be registered?

Not below the threshold. Export receipts count towards the ₹20 lakh registration limit (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura), but on the reading most practitioners follow, an exporter of services whose total turnover stays within that limit does not have to register. If you are not registered, you do not file an LUT and you send an ordinary invoice with no GST on it. The GST guide for freelancers explains the threshold.

If you are registered, read on.

LUT or pay IGST: the two routes

A zero rated supply can be made in two ways:

• Under a Letter of Undertaking (LUT), without charging any GST. You can then claim a refund of the GST you paid on your own costs.
• By paying IGST on the export and claiming that IGST back as a refund. Since October 2023 this route is limited to supplies the government has notified for it, and it ties up cash until the refund arrives.

Almost every freelancer and agency uses the LUT.

How to file an LUT

The LUT is filed online in Form GST RFD-11:

1. Log in at gst.gov.in and go to Services > User Services > Furnish Letter of Undertaking (LUT).
2. Choose the financial year the LUT is for.
3. Tick the declarations and enter the details of two independent witnesses.
4. Sign with your DSC or EVC and submit.

You get an acknowledgement (ARN) straight away, and the LUT is treated as accepted on filing. Keep the ARN: many exporters print it on their invoices.

An LUT lasts for one financial year. File a new one for each year, before your first export invoice of that year. Filing for 2026-27 opened in February 2026. Any registered person can use an LUT, except someone prosecuted for tax evasion above ₹250 lakh.

What the export invoice must show

An export invoice has the usual tax invoice fields (see the GST invoice format guide), with these changes:

• The export declaration. The rule asks for this wording, in capitals:

  "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"

  The shorter "supply meant for export under LUT without payment of IGST" that many people use is not the text in the rule. Printing the full wording is the safe choice.

• The client's name and address, and the address of delivery.

• The name of the country of destination.

• No GST charged, and the invoice value in the currency you billed.

Issue the invoice within 30 days of finishing the work, like any other tax invoice.

Getting paid

To count as an export, the payment has to arrive as convertible foreign exchange, or in rupees where the RBI permits it, for example through a Special Rupee Vostro Account. Payments through PayPal, Wise or Payoneer qualify when they reach your Indian bank account as foreign exchange. Keep the inward remittance advice (FIRA) or e-BRC your bank or provider issues: it is your proof.

How long the payment can take. New foreign exchange rules came into force on 1 October 2026. Under them, the full value of a services export must be received within 9 months of the invoice date, or 12 months if you invoiced in Indian rupees. Your bank can extend this. The limit changed several times recently: it went from 9 months to 15 months in November 2025, back to 9 months in June 2026, and the new regulations took over in October 2026.

What happens if it does not arrive. Under the LUT you promise to pay the IGST with interest if the money is not received in time. The deadline is 15 days after the later of one year from the invoice date or the foreign exchange period above.

Refunds of GST on your costs

Because exports are zero rated, the GST you paid on inputs (software, equipment, a coworking desk) can be refunded instead of piling up as unused credit. You claim it in Form GST RFD-01, within two years of the relevant date. Since 1 October 2025, refunds on zero rated supplies are processed faster: 90% is granted provisionally within 7 days of the acknowledgement, unless the system flags the claim for a detailed check.

Coming up

The GST Council meeting of 8 October 2026 recommended a circular on receiving export payments in foreign exchange or rupees, alongside the change to the branch condition above. Neither is in force yet. We will update this guide when they are notified.

Where sync.d fits

In sync.d, an invoice in any currency other than rupees is treated as an export and carries no GST lines. Add the export declaration and your LUT's ARN in the invoice's Notes / Terms field (or in your default invoice notes, so every export invoice has them). Invoices can carry a PayPal or Wise pay link, and you mark them paid when the money lands.