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GST Rate on export invoice (IT based service) - 18% or 0%?

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Ghemachandar

Proprietor

28 Points Posted on 21 May 2021

Hello everyone!!

I'm a freelancer offering web development services to both Indian and foreign clients. For Indian clients, I invoice at 18% GST rate but wondering at what rate I must invoice the foreign clients.

Since exports of services is 'zero rated' under GST regime, should I invoice foreign clients at 0%? Or, should I invoice at 18% and then simply do not pay the tax? (LUT has been furnished for export of services.)

Kindly assist. Thank you!

Replies (2)

Quick Summary

This discussion clarifies the GST rate applicable to IT-based service exports. For services exported to foreign clients, even though the GST rate is noted as 18%, the actual tax charged is 0%. This is because services exported under the GST regime are 'zero-rated'. Freelancers should invoice at 18% but indicate no tax is payable, especially if they have furnished a Letter of Undertaking (LUT) for exports.