GST on IT services outside India

Hello,

I am a professional working for a company registered in the United States of America. I have a part time contract signed with the company which talks about software development services. I am located in India and work from India. I am paid in USD on an hourly rate. The payment is made to my Paypal account in USD. The USD is then converted and credited to my bank account in India.

Do I need to be registered under GST for the above ? My engagement with the company is on hourly basis and hence can be above or below 20 lakh. Is this a Zero rated supply as mentioned in link.

1) Am I entitled to get registered under GST ?

2) Do I need to pay any GST ? If yes, how much ?

3) Can I claim back any GST ?

Hey there!

Great question about GST on IT services you provide to a US company while working from India. Let's break down your queries:

1) Do you need to register under GST?

If your aggregate turnover in a financial year exceeds ₹20 lakh (₹10 lakh for some states), GST registration is mandatory.
Since your contract is part-time and payment varies, you should monitor your turnover.
If your turnover stays below ₹20 lakh, registration is optional (except in special cases like interstate supply).
If you supply services to a customer outside India (export of services), even if turnover exceeds ₹20 lakh, you need to register to claim zero-rated benefits.

2) Do you need to pay GST? If yes, how much?

Services you provide to a foreign client qualify as export of services under GST if these conditions are met:
- Supplier (you) is located in India.
- Recipient is located outside India.
- Supply is not a mere transfer of goods from India to outside.
- Payment is received in convertible foreign exchange or in Indian rupees wherever permitted.
- Supplier and recipient are not related persons or related in specified manner.
Export of services is treated as zero-rated supply, meaning:
- GST rate on such services = 0%
- You do not pay GST on your output supply (i.e., zero-rated).

3) Can you claim back any GST?

Yes, if you pay GST on your input goods or services (like software, internet, office expenses), you can claim Input Tax Credit (ITC).
You can claim refund of unutilized ITC on export of services under Section 54 of CGST Act.
For claiming refund, GST registration is a must.

Summary:

Question	Answer
Need GST registration?	Yes, if turnover > ₹20 lakh or for export of services
GST on your service?	Zero-rated (0%) for export
Can you claim ITC or refund?	Yes, on inputs used for export