Software developers, designers, writers, consultants and other professionals in Gurugram increasingly work for clients in the US, UK, UAE and Europe, paid in dollars, pounds or euros. Two questions come up every time: “Do I need GST registration?” and “Do I have to charge 18% GST to my foreign client?” In most cases the answers are “only above the limit” and “no”.
Is income from a foreign client an export of services?
Under section 2(6) of the IGST Act, a supply is an export of services when all five conditions are met:
| Condition | What it means for a freelancer |
|---|---|
| Supplier is located in India | You work from India |
| Recipient is located outside India | Your client is abroad |
| Place of supply is outside India | Generally the client’s location (section 13 of the IGST Act) |
| Payment is received in convertible foreign exchange (or in rupees where RBI permits) | Money arrives from abroad through a bank or a payment platform |
| You and the client are not just establishments of the same person | The client is not your own branch abroad |
If any condition fails, the supply is not an export and is taxed like a domestic service.
Do you need GST registration?
| Your situation | Registration |
|---|---|
| Aggregate turnover up to Rs 20 lakh in a year (services, in Haryana) | Not compulsory |
| Aggregate turnover above Rs 20 lakh | Compulsory |
| Below the limit but want to claim input tax credit or refunds | Voluntary registration is allowed |
Two points catch people out:
- Exports count in aggregate turnover. A freelancer earning Rs 25 lakh only from foreign clients has crossed the Rs 20 lakh limit and must register, even though no GST will be charged on those invoices.
- Below the limit, you do not need to register just because the service is an export. Service providers making inter-state supplies, and exports are treated as inter-state, are not forced to register below the threshold.
Zero-rated: no GST charged to the foreign client
Exports are “zero-rated” under section 16 of the IGST Act. Once registered, you have two options:
- Export under LUT (most common): file a Letter of Undertaking in FORM GST RFD-11 on the GST portal for the financial year, then invoice your foreign client without IGST. The invoice should state: “Supply meant for export under LUT without payment of IGST”.
- Pay IGST and claim a refund: charge and pay IGST, then claim it back. This blocks cash, so most freelancers use the LUT route.
The LUT must be filed before you raise export invoices for the year, and renewed every financial year.
Intermediary services: a change in 2026
Until 2026, “intermediary” services, such as arranging or facilitating a supply between a foreign client and someone else, had a special place-of-supply rule: the place of supply was in India, so they were taxed even when the client was abroad. The Finance Act, 2026 omitted that rule (section 13(8)(b) of the IGST Act). The place of supply for such services now follows the general rule, the recipient’s location, so they can qualify as exports if all five conditions above are met.
If you work on commission, as a sourcing agent, or as a sales or marketing representative for a foreign company, have your arrangement checked. The date from which this applies, and how it affects older invoices, matters.
Documents to keep
- Contract, engagement letter or statement of work with the foreign client
- Export invoices showing the LUT statement and no IGST
- Proof of foreign exchange receipt: bank advice, FIRC / FIRA or e-BRC, or the platform’s payout statement
- The LUT acknowledgement for each financial year
- GSTR-1 and GSTR-3B filings, with exports reported as zero-rated supplies
Returns after registration
Registered freelancers file GSTR-1 and GSTR-3B (monthly, or quarterly under the QRMP scheme where eligible), reporting exports under LUT as zero-rated supplies, plus the annual LUT. Domestic clients in India are charged GST normally.
Working with foreign clients? We handle registration, the LUT and the returns, and check whether your income qualifies as an export. See LUT and GST refunds and GST registration in Gurgaon.