GST · Export Services

GST Export of Services vs Intermediary Services: The Practical Difference

Finin2min GST Desk·June 2026·8 min readEXPORT VS INTERMEDIARY

One of the biggest GST traps for cross-border service income is confusing “working for a foreign client” with “export of services”. 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.

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 “own account” 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.

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 — 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.

⚠ Practical caution: Do not use the word “commission”, “agent”, “facilitation” or “brokerage” casually in contracts if the business position is that services are supplied on own account.

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Export or intermediary?Create a one-page GST position memo before claiming zero-rated export treatment for overseas revenue.

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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.

Frequently Asked Questions

Is every foreign-client invoice export of services? ▼

No. All export-of-services conditions must be satisfied, and intermediary/fixed-establishment issues should be checked.

What is the biggest intermediary red flag? ▼

Commission for arranging or facilitating a supply between two other persons is a major red flag. Contract wording and actual conduct both matter.

Can a marketing agency export services? ▼

Yes, if it supplies marketing services on its own account to a recipient outside India and satisfies export conditions. But pure sales facilitation/agency models need careful review.