GST on IT Services to International Clients

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Owner
21 Points Posted on 24 November 2022

Hi,

I am a freelancer developing websites for both Indian and International clients. I have taken GST no. in my company name. My company is a Sole proprietorship company with only me as it's employee.

My query is -

- For Indian clients GST rate on the services is 18% but I am not sure about GST rate on International client

- Since it is an export of services and if it is exempted then do I have to mention in the invoice the GST (VAT) rate as 0%.

Pl. guide me.

Thanks 

Manu

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On 24 November 2022 at 18:33 Report
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Quick Summary
This discussion clarifies the Goods and Services Tax (GST) implications for freelancers providing IT services to international clients. Exports of services are generally zero-rated if specific conditions are met, such as the client being outside India and payment received in foreign exchange. While GST isn't charged, it's crucial to file a Letter of Undertaking (LUT) and mention its details on the invoice, rather than a 0% GST rate. This allows for potential refunds of unutilised Input Tax Credit (ITC).

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Chartered Accountant
145 Points Posted on 24 November 2022
Yes gst rate of export is 0% & make sure LUT had filed up timely

Regard
Amit Rathore
www.rathoretaxconsultant.com
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On 24 November 2022 at 19:05
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Student CA Final
422 Points Posted on 24 November 2022
Hi Manu,

For qualifying as export of services, few conditions needs to be satisfied like recipient should be outside India, POS outside India, Amount received in convertible foreign exchange, supplier located in India, supplier and receipent are not merely an establishments of distinct person.

If above conditions satisfy then it will qualify as Export of services. If you are doing Exports without payment of GST then you need to take LUT under GST. Also, you need to mention LUT details on the invoice. However you need not mention GST as 0% on the invoice. Also you need to generate IRN for the said invoice if exceeded turnover limit.
Please note that you can avail refund of Unutilised ITC in future against the exports made.

Trust this clarifies. If any more clarifications required, please write mail at Bhavana @ lbkca.in, we will be happy to assist you further.

Thanks
Bhavana K L
Chartered Accountant
L B K & Associates
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On 24 November 2022 at 20:49

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