Updated on 23rd February 2026

 

GST on Export of Software & IT Services from India – Complete Guide

 

Export of software and IT services from India is treated as a zero-rated supply under GST, subject to fulfillment of specific legal conditions. This allows exporters to supply services without GST burden while claiming refund of eligible input tax credit (ITC).

This guide explains GST applicability, legal conditions, LUT, invoicing, refund process, and compliance requirements for software service exporters in a clear and practical manner

Understanding GST for Freelancers in India

 

In India, Goods and Services Tax (GST) is applicable to the services provided by freelancers, as per the GST law. Freelancers are considered as service providers operating in the course or furtherance of business, making their services taxable under GST.

If a freelancer’s annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states), GST registration becomes mandatory. However, if a freelancer is engaged in the export of services, GST registration is required irrespective of turnover.

Once registered, freelancers must charge 18% GST on their taxable services. However, some services attract a lower rate or may be exempt from GST altogether.

Legal Provisions Governing Export of Software Services

• Section 2(6) of IGST Act – Definition of Export of Services

• Section 16 of IGST Act – Zero Rated Supply

• Section 13 of IGST Act – Place of Supply (when recipient outside India)

• Section 7 of IGST Act – Inter-State Supply

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Export of Services and GST Compliance

 

What Qualifies as Export of Services?

Export of services is classified as zero-rated supply under GST, meaning no GST is levied, but exporters can claim Input Tax Credit (ITC) on the GST paid for inputs and input services.

As per Section 2(6) of the IGST Act, for a service to qualify as an export of service, the following conditions must be met:

1. Supplier of service is located in India.
2. Recipient of service is located outside India.
3. Place of supply of service is outside India.
4. Payment for such service is received in convertible foreign exchange or in INR, as permitted by the RBI.
5. Supplier and recipient must not be merely distinct establishments of the same person (as per Section 8 of the IGST Act).

Important: Place of Supply for Software Services

• Under Section 13(2), place of supply is location of recipient (if recipient outside India).

• But if service qualifies as “intermediary” under Section 13(8), place of supply becomes location of supplier → GST becomes payable in India.

• Many IT companies wrongly classified as intermediary and faced 18% GST demands.

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How to Export Services Without Paying GST?

 

Freelancers and businesses exporting services have two options to avoid paying GST at the time of export:

1. Furnishing a Letter of Undertaking (LUT)

Freelancers and businesses with a good compliance history can submit an LUT to the GST department. This allows them to export services without paying GST upfront while still being eligible to claim Input Tax Credit (ITC).

2. Paying GST and Claiming a Refund

If a freelancer does not furnish an LUT, they must pay GST on the export of services and later claim a refund by filing a refund application in Form GST RFD-01.

👉 Key Note: Every payment received from a foreign client does not qualify as export of services. If any of the conditions under Section 2(6) of the IGST Act are not met, the transaction is treated as a domestic supply and becomes taxable under GST.

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GST Treatment on Export of Software and IT Services – Practical Scenarios

Export of software and IT services from India is treated as a zero-rated supply under GST when legal conditions are satisfied. The table below explains how GST applies in common real-world IT export situations.

GST Treatment Scenarios for Software & IT Service Exports

 

These examples help determine whether a software or IT service qualifies as export under GST.

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Example: GST Compliance for Software & IT Service Exporter

Example: An Indian IT services company provides cloud integration and software development services to a client in Australia.

Facts:

• Supplier located in India

• Recipient located outside India

• Services delivered electronically

• Payment received in USD

• LUT filed on GST portal

GST Treatment:

• Classified as export of IT services

• Zero-rated under GST

• Invoice raised at 0% GST

• Eligible for refund of ITC on expenses like cloud hosting, SaaS tools, professional fees

This structure is fully compliant with GST law for export of software and IT services.

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LUT vs IGST Payment for Software & IT Services Export

 

 

Software and IT service exporters can choose either route. The comparison below helps decide.

For most software and IT service exporters, LUT is the preferred route.

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Documents Required for Export of Software and IT Services Under GST

Maintaining proper documentation is essential to avoid refund rejection.

For a full suite of GST compliance services including registration and return filing, explore our GST Services page

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Common GST Mistakes by Software & IT Service Exporters

Many IT exporters face GST notices or refund delays due to:

• Treating IT service exports as exempt instead of zero-rated

• Not filing LUT before raising export invoices

• Incorrect place of supply determination for IT services

• Missing or delayed foreign remittance proof

• Incorrect reporting of export turnover in GST returns

Avoiding these mistakes ensures smooth GST compliance.

GST Return Filing for Export of Services

Freelancers and businesses exporting services must comply with regular GST return filings to remain compliant and claim ITC or refunds. The key GST returns are:

1. GSTR-3B (Monthly/Quarterly Filing)

• Must be filed on a monthly or quarterly basis based on turnover.
• Exported services must be reported in Table 3.1(d) of GSTR-3B.

2. GSTR-1 (Details of Outward Supplies)

• Filed monthly or quarterly based on turnover.
• Exported services must be reported in Table 6A of GSTR-1.

3. Invoice & Document Maintenance

Export invoices must comply with GST rules and should include:

• Clear mention of “Supply meant for export under LUT without payment of IGST” or IGST payment reference

• Name, address, and country of recipient outside India

• Invoice value in foreign currency

• GSTIN and LUT number (where applicable)

• Correct place of supply declaration

Supporting documents such as FIRC or bank realization proof should be preserved.

Besides GST export compliance, many exporters also require an Import Export Code (IEC) — read our detailed IEC registration guide.

4. GST Refund for Exported Services

• If GST is paid, a refund can be claimed via Form GST RFD-01.
• If LUT is filed, no GST is paid, but ITC can still be claimed.

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Additional Insights: GST for Freelancers in Special Cases

1. GST on Freelancers Providing Services to Indian Clients

• If a freelancer provides services within India, GST is charged at 18% (unless the service is exempt).
• Reverse charge mechanism (RCM) may apply for specific services.

2. GST on Freelancers Receiving Payments from Foreign Clients

• Every transaction must meet the export criteria to be zero-rated.
• If the criteria are not met, GST must be charged at 18% even for foreign clients.

3. GST Exemptions for Freelancers

Some services like education, healthcare, and specific government-related services may be exempt from GST. Always check the latest GST rate notifications.

Step-by-Step GST Compliance for Export of Software Services & IT Services

• GST registration (mandatory even if turnover below ₹20 lakh for exports)

• Apply LUT before exporting

• Raise export invoice without GST

• Report in GSTR-1 (Table 6A)

• Report in GSTR-3B under zero-rated supplies

• File refund application (RFD-01)

• Maintain FIRC/BRC proof

Common Mistakes in GST on Software Export

• Treating export as exempt instead of zero-rated

• Not filing LUT before export

• Misclassifying intermediary services

• Not reconciling GSTR-1 and 3B before refund claim

• Delay in refund due to invoice mismatch

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FAQs on GST for Freelancers in India

Q1: Is GST registration mandatory for freelancers in India?

👉 Yes, if your turnover exceeds ₹20 lakhs (₹10 lakhs for special category states). However, GST registration is mandatory for exporters irrespective of turnover.

Q2: What is the GST rate on freelance services?

👉 The standard GST rate for freelance services is 18%. Some services may be exempt or attract a lower rate.

Q3: Can freelancers claim Input Tax Credit (ITC)?

👉 Yes, freelancers registered under GST can claim ITC for GST paid on business-related expenses.

Q4: How can freelancers export services without paying GST?

👉 By submitting an LUT to the GST department, freelancers can export services without paying GST.

Q5: Can freelancers claim a GST refund?

👉 Yes, if they have paid GST on exported services, they can claim a refund via Form GST RFD-01.

Q6: What happens if I receive payments from a foreign client but don’t meet export conditions?

👉 If your transaction does not meet the conditions of export under Section 2(6) of IGST Act, then it is treated as a domestic taxable service, and GST at 18% is applicable.

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1. What is Corporate Tax:-

Corporate Tax is a form of direct tax levied on the net income of corporations and other businesses.

Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions

2. Who is subject to Tax:–

Broadly, Corporate Tax applies to the following “Taxable Persons”:

• UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE;
• Natural persons (individuals) who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due course; and
• Non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE (which is explained under [Section 8]).

Juridical persons established in a UAE Free Zone are also within the scope of Corporate Tax as “Taxable Persons” and will need to comply with the requirements set out in the Corporate Tax Law. However, a Free Zone Person that meets the conditions to be considered a Qualifying Free Zone Person can benefit from a Corporate Tax rate of 0% on their Qualifying Income (the conditions are included in [Section 14]).

Non-resident persons that do not have a Permanent Establishment in the UAE or that earn UAE sourced income that is not related to their Permanent Establishment may be subject to Withholding Tax (at the rate of 0%). Withholding tax is a form of Corporate Tax collected at source by the payer on behalf of the recipient of the income. Withholding taxes exist in many tax systems and typically apply to the cross-border payment of dividends, interest, royalties and other types of income.

3. IMPOSITION OF CORPORATE TAX::-

As per the Decree Law, the UAE CT shall be imposed on Taxable Income which shall be at the rate of 0% for taxable income up to AED 375000 and 9% for taxable income exceeding AED 375000 in a Tax Period. As regards Free Zone establishments which qualify as Qualified Free Zone Persons, the UAE CT shall be 0% for Qualifying Income and 9% on Taxable Income which is not qualifying Income.

4. Tax Period:-

For the purpose of imposition of the UAE CT, financial year of a Taxable Person shall be the Georgian calendar year or twelve months period for which the taxable person prepares financial statements.

5. Process of Registration, Filing and Paying the Taxes:-

All Taxable Persons (including Free Zone Persons) will be required to register for Corporate Tax and obtain a Corporate Tax Registration Number. The Federal Tax Authority may also request certain Exempt Persons to register for Corporate Tax.

Taxable Persons are required to file a Corporate Tax return for each Tax Period within 9 months from the end of the relevant period. The same deadline would generally apply for the payment of any Corporate Tax due in respect of the Tax Period for which a return is filed.

LLP stands for Limited Liability Partnership, and it is a type of partnership firm where partners have limited liability. LLP registration process in India is straightforward and can be completed in the following steps:

Step 1: Obtain Digital Signature Certificate (DSC)

The first step in the LLP registration process is to obtain a digital signature certificate (DSC) for all the designated partners. A DSC is required to sign the online registration documents.

Step 2: Obtain Designated Partner Identification Number (DPIN)

Every designated partner of an LLP is required to obtain a designated partner identification number (DPIN) from the Ministry of Corporate Affairs (MCA). This is a unique identification number that is required for filing the LLP registration documents.

Step 3: Reservation of Name

The next step is to reserve a unique name for your LLP. This can be done by filing Form LLP-RUN (Reserve Unique Name) with the MCA. The name should be unique and should not resemble any existing company or LLP.

Step 4: File Incorporation Documents

Once the name is approved, the next step is to file the LLP incorporation documents with the MCA. The documents required for LLP registration include Form LLP-INC 32 (Incorporation Document and Subscriber’s Statement), Form LLP-INC 33 (LLP Agreement), and Form LLP-INC 34 (Statement of Consent and Appointment of Designated Partners).

Step 5: Obtain Certificate of Incorporation

After submitting the LLP incorporation documents, the MCA will verify the documents and issue a certificate of incorporation if everything is in order. The certificate of incorporation is the final document that confirms the formation of the LLP.

Once the LLP is registered, it is mandatory to file annual returns and other compliance documents with the MCA to maintain the LLP’s status.

In India, the Goods and Services Tax (GST) is a value-added tax that is levied on the supply of goods and services. GST registration is mandatory for businesses that have a turnover of more than Rs. 40 lakhs (Rs. 20 lakhs for businesses in northeastern states). Here are the steps to register for GST in India:

1. Visit the GST portal (https://www.gst.gov.in/).
2. Click on the ‘Services’ tab and select ‘Registration’ from the drop-down menu.
3. Select the ‘New Registration’ option.
4. Fill out the registration form with the required details, including PAN card, Aadhaar card, business details, bank account details, and authorized signatory details.
5. Upload the required documents, including PAN card, Aadhaar card, business address proof, bank statement, and proof of business constitution (partnership deed, company registration certificate, etc.).
6. Submit the application and wait for the application reference number (ARN) to be generated.
7. Once the ARN is generated, the application will be reviewed by the GST officer.
8. If any additional information or documents are required, the GST officer will request them through the GST portal.
9. If the application is approved, the GST registration certificate will be issued.

The process of GST registration typically takes 5-7 working days. It’s important to note that GST registration is mandatory for businesses with a turnover of more than Rs. 40 lakhs (Rs. 20 lakhs for businesses in northeastern states), and failure to register can result in penalties and fines

If You have any doubt or query regarding the Import Export Code (IEC) Registration , feel free to contact the us

CA Neeraj Bansal

+91-9718046555

Import Export Code (IEC) Registration in India 2026 – Complete Guide

 

 

Introduction

 

Who Needs IEC Code?

 

 

Documents Required for IEC Code Registration (2026)

Last Updated: January 06, 2026

There are many Taxpayers who has escaped the income intentionally or unintentionally by not declaring the Saving Interest, Fixed Deposit Interest, Capital gain transactions, Purchase or sale of immovable properties and other as specified by the department under high value transactions. Taxpayers are getting the email/sms alert from the department about these high transactions value.

However, since the date of revision of income tax returns i.e. 31st march 2025 is over so taxpayers was in dilemma that how to revise or deposit the tax amount.

Now the government has come with a solution to file the Updated Tax Return in Form ITR-U along with applicable ITR Forms (I.e. ITR-1,2,3,4,5,6,7 as applicable)

What Counts as High Value Transactions (SFT) in FY 2025-26?

High value transactions (also called reportable transactions) include the following with their current reporting thresholds (aggregated annually, bank-wise or entity-wise where applicable; no major changes announced in Budget 2025 for these core SFT limits):

Why You Might Receive Income Tax E-Campaign Alerts

 

Step-by-Step: How to Check and Respond to High Value Transactions

ITR-U (Updated Return): Key Rules in 2026ITR-U allows voluntary declaration of escaped income post-regular deadlines: 

Tips to Stay Compliant and Avoid Future Alerts

On consideration of difficulties reported by the taxpayers and other stakeholders in filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961(the “Act”), Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22. The details are as under:

1. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st July, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th September, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st December, 2021;
2. The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is 30th September, 2021, as extended to 31st October, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 15th January, 2022;
3. The due date of furnishing Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is 31st October, 2021, as extended to 30th November, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st January, 2022;
4. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31st October, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th November, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 15th February, 2022;
5. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November, 2021 under sub-section (1) of section 139 of the Act, as extended to 31st December, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 28th February, 2022;
6. The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31st December, 2021 under sub-section (4)/sub-section (5) of section 139 of the Act, as extended to 31st January, 2022, vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st March, 2022;

It is also clarified that the extension of the dates as referred to in clauses (9), (12) and (13) of Circular No.9/2021 dated 20.05.2021 and in clauses (1), (4) and (5) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds rupees one lakh. Further, in case of an individual resident in India referred to in sub-section (2) of section 207 of the Act, the tax paid by him under section 140A of the Act within the due date (without extension under Circular No.9/2021 dated 20.05.2021 and as above) provided in that Act, shall be deemed to be the advance tax.

CBDT Circular No.17/2021 in F.No.225/49/2021/ITA-II dated 09.09.2021 issued. The said Circular is available on www.incometaxindia.gov.in

Applicability & Analysis Section 206AB and 206CCA of Income Tax Act, 1961

The Finance Bill 2021, has inserted two new sections in Income Tax Act 1961, which are related to TDS which are Section 206AB and Section 206 CCA which are applicable from 1^st July 2021.

Brief about Section 206AB

According to these provisions of the income tax act, TDS will be required to be deducted at higher of the following: –

1. At Twice rate of the TDS as specified in the relevant provision of the act; or
2. Twice the rate in force; or
3. At the rate of 5%

Applicability of the Section 206AB

This provision applicable on “Specified Persons”. Specified Persons means: –

• Person who has not filed the Income Tax Return (ITR) for 2 previous years immediately before the previous year in which tax is required to be deducted;
• The time limit of ITR filing under sub-section (1) of Section 139 is expired; and
• The aggregate tax deducted at source (TDS) or tax collected at source (TCS), is Rs. 50,000 or more in each of the 2 previous years.

What is the person does not have PAN not filed Income Tax Return

Sub-section (2) of Section 206AB states that if both Section 206AA and 206AB are applicable i.e. the “specified person” has not submitted the PAN and not filed the return; TDS is deducted at the higher rates amongst Section 206AA and 206AB.

Non-Applicability of 206AB of the TDS: –

1. The section 206AB is not applicable in case of TDS on Salary (192), TDS on Premature withdrawal from EPF (192A), TDS on Lottery(194B), TDS on cash withdrawal in excess of 1 crore (194N), TDS on Income in respect of investment in securitization trust (194LBC), TDS on Horse Riding (194BB)
2. Both Section 206AB/206CCA are not applicable to a non-resident who does not have a permanent establishment in India.

Example: –

M/s GEM Delhi LTD made a contract payment of Rs.80 lakhs to Mr. Akhsay Sinha for 3 consecutive years i.e. FY 2018-19, FY 2019-20 and FY 2020-21 and tax under Section 194C was deducted (Rs.90,000 every year) and remitted by GEM Delhi Ltd. Mr. Akshay Sinha however, did not file his Income Tax Return (ITR) for any of the years. Then, in the financial year 2021-22, From July Onwards GEM Delhi LTD, (the payer) must deduct tax at source (TDS) at the higher rates given above.

How can Tax Deductor/ Collector can identify such persons: –

Since tax deductor/collector is responsible for deducting/collecting TDS/TCS, it becomes their responsibility to identify the specified person of whom TDS at the higher rate is required to be deducted. In the absence of proper mechanism, CBDT has issued Circular No. 11 of 2021 F. No. 370133172021-TPL dated 21st June 2021  Wherein a new functionality “Compliance Check for Section 206AB and 206CCA” is made available through reporting portal of Income Tax department.

Additionally, Deductee/Collectee can give self-declaration to their respective tax deductor/collector about the non-applicability of Section 206AB/206CCA upon them. Format of the same is given below: –

 

Undertaking pursuant to Section 206AB and Section 206CCA of the Income Tax Act, 1961

TO WHOMSOEVER IT MAY CONCERN

Dear Sir/Madam,

Subject: Declaration confirming filing of the Income Tax Return for immediate two preceding years.

I,                                                                           (Authorized person name)in capacity of

Authorized Signatory of                                         (Company Name) having                                     PAN

And turnover or Rs.10 cr. or more _______________________(YES/NO)                 

Registered office at                                                                                                                             _ do

hereby declare, we have filed Income Tax Returns for Two previous years immediately prior to the previous year in which tax is required to be deducted for which due date filing of return of income under sub section(1) of section 139 of the Income Tax Act, 1961 has expired, the details of which are givenunder:

Financial for which Income Tax Return was due u/s 139(1)	Date of Filing	ITR Acknowledgement No.	TDS + TCS is greater than           Rs. 50000/- (Yes/No)
F.Y.2020-21 (If applicable on this date of declaration)
F.Y. 2019-20
F.Y. 2018-19

I hereby undertake to indemnify the entity for any loss/liability fully including any Tax, interest, penalty, etc. that may arise due to incorrect reporting of above information.

                                                                                                  For   (CompanyName)

Signature (Including Companyroundstamp)       :                                                       _________

Place                                                                    :                                          _______________

Date                                                                     :                                          _______________

In the event that you are anticipating start a NGO in India, at that point the time thing that you would require is NGO registartion. Additionally, you would likewise require information about the various NGOs in India. In this blog, we will discuss about the various kinds of NGOs, their registration and what are their advantage

TYPES OF NGO REGISTRATION IN INDIA-

• As per Trust Act
• As per Societies Act
• As per Companies Act 2013

NGOs in india can be registered under 3 Law/Act-

43rd Council Meeting Announcement – Dated 28th May 2021-

GST Amensty Scheme Announed For Pending Return From July 17 to April 21

1) अगर किसी की टैक्स Liability नही है तो उसकी लेट फ़ीस 500 लगेगी

2) अगर किसी की टैक्स liability है तो उसकी लेट फ़ीस 1000 लगेगी

लेकिन डीलर को अपना पेंडिंग रिटर्न GSTR 3B 01st June से 31st Aug के बीच भरना होगा

Late Fees for Future Return :-
1) अगर किसी का Output Tax नही है तो 500 Per Return होगी

2) जिसका पिछले साल sales 1.5 Cr है, उसकी 2000 Late Fees होगी Per Return

3) जिसका पिछले साल sales 1.5 Cr से 5 Cr है, उसकी late fees 5000 होगी

4) जिसका 5 Cr से ज़ायद है उसके लिए 10000 होगी

5) Composition वालों के लिए अगर टैक्स liability नही है तो 500 और अगर टैक्स है तो 2000 होगी GSTR 4 के लिए

6) GSTR 7 के लिए ये 50 Per day और maximum 2000 होगी