ITR
When freelance work counts as export of services
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Facts
Under Sec 2(6) of the IGST Act, a service is an export when the supplier is in India, the recipient is outside India, the place of supply is outside India, payment is received in convertible foreign exchange (or in rupees where RBI permits), and the two are not merely establishments of one person.
Provisions and law
- Sec 2(6), IGST Act 2017Export of services needs a supplier in India, recipient outside India, place of supply outside India and payment in convertible foreign exchange (or INR where RBI permits)
- Sec 16, IGST Act 2017Export of services is a zero-rated supply; it can be made under LUT without paying IGST
Analysis
All five conditions must hold. Example: a designer in Pune working for a Canadian company paid in USD meets them. Work for an Indian subsidiary of a foreign company, paid in rupees from India, usually does not, and attracts 18% GST if registered. Check each client.
Conclusion
- Check each client's location
- Confirm the place of supply rule for the service
- Ensure payment comes in foreign exchange
- Keep FIRA with each invoice
A Savvy can do this for you
Freelancer return with foreign clients, Sec 44ADA
₹2,999
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