Export of Services Under GST: Five Tests, LUT and Refund
Reviewed by CA Nikhil Gupta · Last reviewed 30 August 2026
A service is an export only when supplier is in India, recipient outside India, place of supply outside India, payment is received in permitted foreign…
A service is an export only when supplier is in India, recipient outside India, place of supply outside India, payment is received in permitted foreign exchange/INR, and supplier/recipient are not merely establishments of the same person.
For the connected rule or filing step, see GST Export of Services vs Intermediary Services: The Practical Difference.
Legal or Computational Framework
Governing rule
Exports are zero-rated. A registered exporter can use LUT/bond without IGST and claim unutilised ITC refund, or pay IGST where permitted and claim refund.
Correct calculation method
Test all five export conditions; determine place of supply; obtain LUT before supply; issue export invoice; receive payment within FEMA period; reconcile GSTR-1/3B and refund.
Step-by-step workflow
- Test all five export conditions.
- determine place of supply.
- obtain LUT before supply.
- issue export invoice.
- receive payment within FEMA period.
- reconcile GSTR-1/3B and refund.
Worked example
An Indian consultant serves a UK customer and receives GBP, but if the customer is the consultant's own foreign branch, the fifth condition can fail.
The example is an illustration, not a substitute for the taxpayer's facts. A change in status, period, payment mode, document, city, asset, relationship or scheme can change the result.
Why generic pages get this wrong
Search pages often state a rate or limit without identifying the governing base. The calculation must distinguish gross receipt from taxable profit, tax from TDS, a deduction from an exemption, salary from business income, and an accounting entry from the tax treatment.
Decision matrix
| Decision point | Required treatment |
|---|---|
| Legal year | Use the Act, rules and notification effective for the income or transaction period |
| Taxpayer category | Confirm residence, age, entity, employee/business status and regime |
| Calculation base | Use the statutory definition rather than CTC, net bank receipt or accounting label |
| Ceiling or rate | Apply actual-amount, percentage, shared, lifetime and gross-income limits in sequence |
| Documentation | Link every input to an invoice, statement, contract, certificate or official record |
| Final output | Show tax, surcharge, cess, interest and TDS/TCS credits separately |
Entity and topical coverage
This page is written around the entities and concepts search engines expect for the topic: GST, export of services, LUT, composition scheme, input tax credit. They are used only where relevant and are connected to the live calculator and knowledge hub rather than repeated mechanically.
What Generic Pages Miss
- Treating exports as excluded turnover.
- Assuming foreign client means export.
- Confusing GST composition and income-tax presumptive tax.
- Claiming personal ITC.
- Forgetting LUT/payment realisation.
Practical Documentation Checklist
- GST registration file
- Contracts and invoices
- LUT and export realisation
- GSTR-1/3B/2B
- ITC allocation
- Turnover reconciliation
For the complete rules on this topic, see the core guide: Home Office Deduction in India: Employee vs Freelancer Rules.
See the broader GST & Indirect Tax knowledge hub for related rules and calculators on this topic.
Finin2min Summary
A service is an export only when supplier is in India, recipient outside India, place of supply outside India, payment is received in permitted foreign exchange/INR, and supplier/recipient are not merely establishments of the same person.
Finin2min rule: establish eligibility, calculate transparently, and preserve an audit trail.
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- GST & Indirect Tax
- Official starting point
- www.indiacode.gov.in