Tax Treatment of Export Service

This discussion clarifies the tax treatment for exporting services from India. Generally, a 18% tax applies. However, if you have a Letter of Undertaking (LUT), you don't need to charge IGST on your bill. Without a LUT, IGST must be charged. The definition of export services under Section 2(6) of the IGST Act requires payment in convertible foreign exchange (or INR where permitted) and that the supplier and recipient are not distinct persons.