Create compliant invoices for exports in India: Zero-Rated Made Easy

Key takeaways

• Export of services is zero rated under GST only if all five conditions are met, including correct place of supply, foreign client location, and receipt in convertible foreign exchange or permitted INR.
• Most freelancers should export under LUT, file a fresh Letter of Undertaking (LUT) each financial year, and never charge GST on such invoices.
• Every export invoice must show SAC code, client’s full foreign address, place of supply statement, zero rated declaration, LUT number, and both foreign currency plus INR equivalent.
• Keep airtight documentation: contract or SOW, invoice copy, exchange rate proof, and the e-FIRA, see this e-FIRA or FIRC guide.
• Use reliable templates and tools, try these ready GST invoice templates and learn what is export invoice.
• Streamline international collections with platforms like Karbon Business, which offers virtual USD, GBP, EUR accounts, fast INR settlement, and automatic e-FIRA, explore Karbon Business.

What qualifies as export of services under GST in India

To be treated as an export of services and enjoy zero rated benefits, your arrangement must satisfy all five conditions.

• Supplier in India: You, or your registered business, is located in India.
• Recipient outside India: Client’s legal entity and billing address are in a foreign country.
• Place of supply outside India: Confirm and document it, learn the nuances of place of supply.
• Payment in convertible foreign exchange or permitted INR: USD, EUR, GBP, or INR as per RBI rules are fine.
• Not establishments of the same person: You and the client must be different legal entities.

Miss any one, your supply risks being treated as domestic, which could trigger GST liability, refund rejections, and compliance queries.

Understanding zero rated supplies and your options

Zero rated supplies carry a 0 percent GST rate, yet you can still claim input tax credit and eligible refunds.

• Export under LUT or Bond, without paying IGST: The most freelancer friendly route, file your annual Letter of Undertaking (LUT) early each April.
• Export with IGST paid: You charge IGST then apply for refund later, this ties up working capital and adds paperwork.

Pro tip, get invoicing right using well structured GST invoice templates so nothing critical is missed.

Place of supply outside India invoice, getting it right

For most freelance services, Section 13(2) of the IGST Act sets the default rule, the place of supply is the recipient’s location.

Place of supply: Outside India, United States

Place of supply: Outside India, United Kingdom, Section 13(2) IGST Act

Add one of the above lines on every export invoice, and retain proof of the client’s foreign address via contract, PO, or official correspondence, this clarity prevents audit disputes and refund delays.

Complete invoice requirements for export of services India, checklist

Mandatory invoice fields

• Your legal business name, full address, and GSTIN.
• Unique invoice serial number, continuous series, for example FE2025-001.
• Invoice date in DD/MM/YYYY format.
• Client’s full legal name and complete foreign billing address.
• SAC code for the service.
• Description, quantity or hours, value, currency.
• Digital or physical signature.

Export specific additions

• Zero rated declaration, one of, Supply meant for export under LUT without payment of IGST or Supply meant for export on payment of IGST.
• LUT or Bond number with validity dates, for example, LUT No. RD2704250012345 dated 01/04/2025, valid till 31/03/2026.
• Place of supply line, Place of supply, Outside India, [Country].
• Amount in foreign currency plus INR equivalent with rate source and date.
• Client email and their foreign tax ID if available.

What you do not need on a service export invoice

• Shipping bill or bill of lading.
• Port code or customs details.
• Recipient GSTIN.

Brush up with curated GST invoice templates, and learn the essentials of a clean export bill with this primer on what is export invoice.

Recommended attachments to keep on file

• Signed contract, SOW, or PO.
• Client communications confirming scope and location.
• e-FIRA or FIRC for each receipt, see the complete e-FIRA or FIRC guide.

SAC code for freelance services, how to find yours

• Software development, IT consulting, web or app, APIs: 9983.
• Graphic design, UI or UX, video, animation: often 9983, photography related can fall in 9985.
• Content writing, SEO, digital marketing, social media: 9984.
• Business consulting, project management, training: 9983 or 9985 depending on scope.
• Accounting and tax services: appropriate 9982 sub category.

Pick a code per service line and stay consistent, if your offering changes, update and document the reason.

Zero rated invoice template, copy ready format

Use this quick build outline to draft a compliant export invoice, then adapt it inside your preferred tool.

• Your business details: Name, full Indian address, GSTIN.
• LUT reference: LUT number and validity.
• Invoice number and date: Continuous series, DD/MM/YYYY.
• Client details: Legal name, complete foreign address, email.
• Currency, INR equivalent: Note RBI or CBIC rate and date.
• Place of supply: Outside India, Country name, Section 13(2).
• Description and SAC: Clear scope, hours or units, rate, SAC.
• Zero rated declaration: LUT without payment of IGST or IGST paid route.
• Payment instructions: Bank SWIFT or virtual foreign account details.
• Signature: Digital or scanned.

Ready to paste wording blocks:

Supply meant for export under LUT without payment of IGST.

Place of supply, Outside India, [Country], as per IGST Act Section 13(2).

Amount invoiced, [Currency] [Amount], INR equivalent, ₹[Amount] at RBI reference rate dated [Date].

Download and customize from trusted sources like GST invoice templates, Vyapar export GST invoice formats, and Zoho Invoice free generator.

Step by step, how to build and issue a GST export invoice

1. Validate all five export conditions, including place of supply.
2. File or renew LUT for the year via GST portal.
3. Collect complete client details, legal name, full foreign address, email, tax ID if available.
4. Select the correct SAC code for your service.
5. Choose invoice currency, compute INR equivalent using RBI or CBIC rate on the supply date.
6. Draft the invoice with all mandatory and export additions.
7. Add clear payment instructions, virtual foreign account or SWIFT details.
8. Issue the invoice to the client via email or your invoicing tool.
9. On payment, obtain e-FIRA or FIRC from your bank or platform.
10. Report the invoice in GSTR-1, Table 6A, reconcile on receipt.

Evidence and documentation you must retain

• LUT acknowledgment for the financial year.
• Signed contract, SOW, or PO.
• Client correspondence proving scope and location.
• Invoice copies, digital and physical.
• e-FIRA or FIRC for each payment.
• Exchange rate source and date used for INR conversion.
• ITC and refund working papers with supporting bills.

Currency, exchange rate, and INR reporting rules

Invoice in your client’s currency, yet always record INR equivalent for GST returns. Use the RBI reference rate or CBIC notified rate on the date of supply, which is typically the invoice date or the payment date, whichever is earlier.

Example, USD 2,000 invoiced on 20 May 2025, RBI rate 1 USD equals ₹83.50, INR equivalent ₹1,67,000, show both on the invoice and report ₹1,67,000 in GSTR-1, Table 6A.

If you hold funds in a multi currency account, your GST INR value still follows the supply date conversion, reconcile with your CA when bank conversion differs.

Common mistakes and how to fix them fast

• Charging GST under LUT: Do not add IGST, CGST, or SGST on zero rated invoices, if sent, issue a credit note or revised invoice.
• Missing place of supply or full address: Add the explicit place of supply line and ensure a complete foreign billing address.
• Wrong or missing SAC: Verify before issuing, correct prospectively and inform your CA for return alignment.
• No LUT declaration or number: Print the declaration and LUT number on every export invoice.
• Skipping e-FIRA or FIRC: Request it immediately on receipt, many platforms generate it automatically.
• Mixing export and domestic on one invoice: Always separate invoices by entity and tax treatment.

For additional pointers, review Vyapar export GST invoice formats and this primer on freelancer GST compliant invoicing.

How to streamline international collections and compliance

Great invoices still need smooth collections, and fast, compliant documentation. Prioritize platforms that offer local receiving accounts, quick INR settlement, automatic e-FIRA, multi currency holding, invoice or payment links, and real time payment tracking.

Karbon Business Karbon Business provides virtual USD, GBP, EUR, and CAD accounts for local transfers, INR settlement in 24 to 48 hours, auto e-FIRA within 24 hours, up to 60 days currency holding within RBI limits, flat 1 percent platform fee with zero FX markup, and convenient WhatsApp or dashboard tracking. Alternatives include Wise Business, Payoneer, PayPal, and Razorpay X International, choose based on your client mix, currencies, cost, and speed needs.

Wrapping up, invoice requirements for export of services India made simple

Confirm the five point export test, file LUT annually, apply the correct SAC, print place of supply and zero rated declaration, show both foreign currency and INR equivalent, collect e-FIRA for each receipt, and file accurately in GSTR-1, Table 6A. Use reliable tools like GST invoice templates, understand what is export invoice, and for a smooth payment workflow, explore Karbon Business. For extra formats inspiration, glance at this invoice format.

FAQ

Do I need GST registration to export services as a freelancer in India?

If your aggregate turnover crosses ₹20 lakh, ₹10 lakh for special category states, you must register. Many freelancers register voluntarily to file LUT, issue zero rated invoices, and claim ITC or refunds. Without GSTIN, you cannot use the LUT route or claim export benefits.

How to file LUT online for zero rated exports, and how soon should I do it?

Log in to the GST portal, go to Services, User Services, Furnish Letter of Undertaking, submit RFD-11 with the required declarations. Do this at the start of every financial year so your export invoices remain tax free. For a quick explainer, review this guide to Letter of Undertaking (LUT).

Which SAC should I use for software development and app projects?

Use 9983 for information technology design and development services. Keep the same SAC for similar work types across invoices, and change it only when your service offering materially changes.

How do I show INR value if I am invoicing in USD or EUR only?

Compute the INR equivalent using RBI reference rate, or CBIC rate, on the supply date, usually the invoice date. Print both foreign amount and INR on the invoice, for instance, USD 2,000, INR ₹1,67,000 at RBI rate dated 20 or 05 or 2025. This INR figure is used in GSTR-1 and GSTR-3B.

What should I write for place of supply on an export invoice for services?

Add a clear line like, Place of supply, Outside India, United States, Section 13(2) IGST Act. This single line prevents most audit queries on export classification, learn more about place of supply.

Is e-FIRA or FIRC compulsory for my international payment receipts?

Yes, e-FIRA or FIRC is your proof of inward remittance, and it is essential for GST refunds and RBI compliance. With Karbon Business, e-FIRA is auto generated within 24 hours, which saves follow ups with banks and speeds up your refund documentation.

Should I export under LUT or charge IGST and claim a refund later?

For most freelancers, LUT is better, your invoices remain tax free for clients, you keep working capital free, and you can still claim ITC or refunds on inputs. Charging IGST locks up cash and adds processing time for refunds, so use it only if your CA advises for a special case.

How do I handle milestone based invoices or partial payments from foreign clients?

Either issue separate invoices per milestone, or one master invoice with a schedule and then issue receipts for each installment. Always map each remittance to its invoice and collect a separate e-FIRA. Platforms like Karbon Business make this easy with automatic e-FIRA and payment tracking.

What if my Indian client wants me to bill their US or UK parent company instead?

If the foreign parent is the true recipient, signs the contract, and pays you, it can qualify as export. If the Indian entity consumes the service, it is a domestic supply with GST. Document the commercial reality carefully and consult your CA where needed.

Where can I download a proper GST export invoice template for freelancers?

Start with these resources, curated GST invoice templates, a quick overview of what is export invoice, and the Vyapar export GST invoice formats. You can also try the Zoho Invoice free generator.

How do I mention currency conversion and exchange rate on the invoice?

Add a line like, Amount, USD 3,000, INR equivalent, ₹2,51,250 at RBI reference rate 1 USD equals ₹83.75 dated 20 or 05 or 2025. Keep a screenshot or PDF of the rate source in your records for audits.

Which platform is best for receiving international payments quickly with less compliance headache?

Look for local receiving accounts, fast INR settlement, zero or low FX markup, and automatic e-FIRA. Karbon Business offers virtual USD, GBP, EUR, CAD accounts, 24 to 48 hour INR settlement, auto e-FIRA in 24 hours, and WhatsApp tracking, making it very suitable for Indian freelancers focused on speed, transparency, and clean compliance.