GST Export of Services vs Intermediary Services: The Practical Difference
One of the biggest GST traps for cross-border service income is confusing âworking for a foreign clientâ with âexport of servicesâ. If the Indian business is actually arranging or facilitating a supply between two other parties, intermediary-service analysis can change the outcome.
Export of Services: Five Conditions to Test
A service is not automatically an export just because the customer is outside India. Under the IGST framework, export of services requires five checks: supplier located in India, recipient located outside India, place of supply outside India, payment received in convertible foreign exchange or permitted Indian rupees, and supplier and recipient not merely being establishments of a distinct person. Miss any one of these checks and the GST position can change completely.
Use the GST LUT Eligibility and Export Action Checker to apply these points to your figures.
| Condition | What to verify | Common evidence |
|---|---|---|
| Supplier in India | Your registered place/fixed establishment is in India | GST registration, invoice profile, business address. |
| Recipient outside India | Customer is located outside India | Contract, purchase order, billing details. |
| Place of supply outside India | Section 13 result should point outside India | Service classification memo, client scope, evidence of performance. |
| Payment condition | Foreign exchange / permitted INR receipt | FIRC/BRC, bank advice, remittance note. |
| Not same establishment | Supplier and recipient are not merely establishments of same person | Group structure, branch/subsidiary analysis. |
What Is an Intermediary?
The IGST Act defines an intermediary broadly as a broker, agent or any person who arranges or facilitates the supply of goods, services, both, or securities between two or more persons. It excludes a person supplying such goods or services on their own account. This âown accountâ distinction is critical. A consultant delivering their own advisory output to a foreign customer is very different from an agent arranging customers for someone else.
For the connected rule or filing step, see CGST Rule 96A â Export of goods or services under bond or Letter of Undertaking.
| Business model | Export argument stronger when | Intermediary risk rises when |
|---|---|---|
| Software development for foreign client | Indian firm delivers software/services on its own account | Indian firm merely connects foreign supplier and Indian buyer. |
| Marketing agency for foreign brand | Agency provides campaign services as principal service provider | Agency is paid commission for arranging sales between brand and customers. |
| Sourcing support | Indian firm buys/sells or provides independent procurement advisory | Indian firm facilitates contract between foreign buyer and Indian supplier for commission. |
| Customer support / back office | Service output is supplied to foreign client on own account | Indian entity arranges main supply between two other parties. |
Documents That Decide the Position
- Master services agreement and statement of work.
- Invoice description and pricing model â fee for service vs commission/agency fee.
- Who controls delivery, pricing and customer relationship.
- Whether Indian entity is principal service provider or merely facilitator.
- Payment evidence, recipient location and place-of-supply memo.
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Official References Used
This article uses official GST law, GST portal guides and CBIC circulars only. Verify rates, forms and procedural changes before publishing because GST notifications and portal flows can change.
For the connected rule or filing step, see Export of Services Under GST: Five Tests, LUT and Refund.
- IGST Act, 2017 - GST Council PDF
- IGST Act - CBIC official HTML
- GST Portal LUT user guide
- CGST Rule 96A - Export under bond / LUT
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.gst.gov.in