Indian freelancer with foreign clients in 2026? When you need GST, and how export of services and the LUT work

Last updated 11 Oct 2026 · India (clients anywhere)

Last checked: 11 Oct 2026 against CBIC: CGST Act s.22 and CBIC: IGST Act s.2(6) and GST portal: LUT guide.

Short answer. Your foreign earnings count towards GST's aggregate turnover. If your total turnover from services, including exports, stays within ₹20 lakh in a financial year (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura), you don't have to register, even though exports are inter-state supplies (Notification 10/2017-Integrated Tax). Once you cross it, register, then file a Letter of Undertaking (LUT, Form GST RFD-11) for the year so you can invoice foreign clients without charging IGST. Exports are zero-rated only if all five conditions of “export of services” are met, including payment in convertible foreign exchange (or rupees where RBI permits).

Why exports count but aren't taxed

GST is a tax on consumption in India. A service consumed abroad is "zero-rated": you don't collect GST on it, and you can still claim credit for GST on your own business costs. But the registration threshold looks at all your turnover, exports included, so a freelancer billing ₹25 lakh a year to US clients must register even though no GST is charged on those invoices.

Is it really an export? The five conditions

You (the supplier) are located in India.
Your client is located outside India.
The place of supply is outside India.
You are paid in convertible foreign exchange, or in Indian rupees where RBI permits (for example through a Special Rupee Vostro Account).
You and the client are not just two establishments of the same person.

For most remote work (design, writing, software, consulting) the place of supply is the client's location. Some services follow other rules, for example services tied to property in India or performed on goods in India; check those with a CA.

What to do at each stage

Your yearly turnover	What to do
Up to ₹20 lakh (₹10 lakh in the four states)	Registration not required. Keep a running total. You may register voluntarily if you want to claim refunds of GST on costs.
About to cross the limit	Apply for GST registration on gst.gov.in.
Registered	File a LUT in Form RFD-11 for the financial year before you invoice exports; add the export endorsement on invoices required by Rule 46 (supply meant for export under LUT without payment of integrated tax); report exports in GSTR-1 and GSTR-3B.

Filing the LUT (from the GST portal guide)

Log in to gst.gov.in → Services → User Services → Furnish Letter of Undertaking (LUT).
Choose the financial year (for now, 2026-27).
Tick the declarations and give the names and addresses of two independent witnesses.
Preview, then sign with DSC or EVC. You get an ARN by email and SMS.

A LUT is valid for the financial year it is filed for; file a new one each year.

Common mistakes

Leaving foreign income out of the threshold. Aggregate turnover includes exports.
Registering and billing without a LUT. Without it you must charge IGST on the export (and claim a refund later), which ties up cash.
Payments routed through a domestic intermediary in rupees. If the money doesn't arrive as foreign exchange (or permitted INR), the supply may not qualify as an export. Keep bank advice or FIRA records.
Forgetting the new year's LUT. The 2025-26 LUT does not cover 2026-27 invoices.
Mixing up GST and income tax. Zero-rated for GST does not mean tax-free income.

Checklist

Monthly running total of all turnover, including exports
Client location and payment route recorded for each invoice
Registration applied for before crossing ₹20 lakh (₹10 lakh)
LUT for 2026-27 filed, ARN saved
Export invoices carry the LUT wording
Bank advice / FIRA saved for each foreign payment

Chasing a client who hasn't paid? See invoice and payment reminder templates.

Frequently asked questions

Do export earnings count towards the GST threshold?

Yes. Aggregate turnover includes exports of services, so foreign earnings count towards the ₹20 lakh (or ₹10 lakh) limit.

Do I need GST registration if I only have foreign clients and earn under ₹20 lakh?

No. Notification 10/2017-Integrated Tax exempts suppliers of inter-state services, including exports, from registration while aggregate turnover is within the threshold. The CBIC FAQ notes you would need registration to claim GST refunds.

What is a LUT in GST?

A Letter of Undertaking in Form GST RFD-11 that lets a registered exporter supply services abroad without paying IGST. It is filed online on gst.gov.in for each financial year.

Is GST charged on export of services?

No, exports are zero-rated: under a LUT you charge no IGST, or you pay IGST and claim a refund.

Official sources

Not tax or legal advice. Place-of-supply rules and payment routes vary; confirm your case with a CA before deciding not to register. Last checked 11 Oct 2026.

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