GST registration for export of service for software industry

First of all I wanted to tell you that I have researched this website as well as other websites about gst registration limit. I found no straight answer.

I am talking about freelancer who provides software development to international clients.

This is 2025 and it’s still confusing whether gst registration is required below 20 lakh turnover for this export of service.

Can anyone answer this with reference?

Thanks in advance 

Replies (3)
Quick Summary
Freelancers exporting software development services internationally often face confusion regarding GST registration, especially with turnovers below the general ₹20 lakh limit. While software exports are considered zero-rated supplies under GST, meaning no tax is charged to the foreign client, registration might still be mandatory if your aggregate turnover exceeds ₹20 lakh (or ₹10 lakh for special category states). Understanding place of supply rules and ensuring payment is received in convertible foreign exchange are crucial to qualify as an export. Once registered, an annual Letter of Undertaking (LUT) allows you to export without paying IGST.

As a freelancer providing software development services to international clients, you're considered an exporter of services.

According to the GST law, exports are treated as zero-rated supplies, meaning no GST is levied on the export of goods or services.

However, this doesn't necessarily clarify the registration requirement.

*GST Registration Limit for Service Exporters* In India, the threshold limit for GST registration is generally ₹40 lakhs for service providers.

However, there are some exceptions and special cases.: -

*Special Category States*: For states like Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand, the threshold limit is ₹10 lakhs. -

*Voluntary Registration*: Even if your turnover is below the threshold limit, you can still register voluntarily under GST.

*GST Registration Requirement Below ₹20 Lakhs* For service exporters like yourself, there's no specific exemption or special threshold limit mentioned below ₹20 lakhs. 

However, if your aggregate turnover exceeds ₹40 lakhs (or ₹10 lakhs for special category states), you'll need to register for GST.

*Key Points to Consider* -

 *Zero-Rated Supplies*: As an exporter, you can claim a refund of input tax credit (ITC) on goods and services used for export purposes. -

*GST Exemption*: Certain software services might be exempt from GST or have a Nil GST rate, but this depends on the specific type of software and its usage.

They can provide personalized guidance based on your business needs and turnover.

Sorry to say but it seems you just copy pasted your answer.

 

FYI: The GST threshold limit is 20 lakhs for service and 40 lakhs for goods.

Software exports are zero-rated supply under GST (Section 16 of the IGST Act), meaning no GST is charged to the foreign client. However, if your aggregate turnover - including the export value - exceeds Rs. 20 lakh (Rs. 10 lakh for special category states), GST registration is still mandatory even if your actual tax liability is zero. Understanding the [place of supply rules for GST](https://taxgarden.in/blog/place-of-supply-rules-gst-interstate-intrastate) is key here, as software exports must qualify as services to a foreign recipient with payment received in convertible foreign exchange to count as export under IGST. Once registered, file an LUT (Letter of Undertaking) annually to export without paying IGST.

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