First and foremost, If you are earning substantial part of your income by rendering services to clients outside India, GST registration is mandatory and such sales must be reported in GSTR filings. If you fall under the this category and failed to register your business with GST do it at the earliest.

Small companies, Freelance professionals providing software or consulting services to entities outside India through freelancer.com, Upwork etc., declare the services as “Export of Services” for the purpose of GST. However, often we end up making small mistakes that might affect our compliance under GST Law.

I have listed a few important points to be kept in mind before raising an export invoice for services.

1.     Application for Letter of Undertaking for export of services without payment of tax

2.     Invoice is raised in Foreign Currency

3.     Invoice should contain the LUT ARN

4.     Amount must be received in Foreign Currency

5.     Obtain Foreign Inward Remittance Certificate from bank after receipt of payment from customers.

6.     Declare Export of Service as Zero-Rated Supply in GSTR-1, GSTR-3B

7.     When signing up with PayPal, Stripe etc., we might not be sure on where the conversion of currency takes place, in such cases the Indian exporter of service must ensure it happens after transfer, otherwise the concerned bank will not issue FIRC. As per GST Law, money must be received in freely convertible foreign currency to declare a transaction as “Export”.

Ensuring the above requirements will save lot of time and resource at later point in time during assessment by department etc. 

Compliance is less complicated if taken care on time. Feel free to reach out to us for any assistance.