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I'm an accountant doing bookkeeping for US small businesses: what applies?

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Editorial team, serviceexportguide.com
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Editorial team
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2 min read

Short answer

Bookkeeping delivered from India to businesses located in the US is usually an export of services: the place of supply is the client's location under section 13(2) of the IGST Act, so no GST is charged under a Letter of Undertaking.12 Banks report the receipts under P1005 (Accounting, auditing, book keeping services), and each invoice needs an Export Declaration Form and realisation within nine months.345 Accountancy is a specified profession, so a resident individual can use the 50% presumptive scheme for receipts up to ₹50 lakh, or ₹75 lakh with cash within 5%.67

Accountants in Ahmedabad, Kolkata and Kochi keep the books of US restaurants, dental practices and online stores: reconciling bank feeds, running payroll and closing the month in cloud software. Whether you work as a solo chartered accountant, a bookkeeper or a small firm, the same three sets of rules apply.

Is bookkeeping for a US business an export for GST?

Usually yes. Bookkeeping has no special place of supply rule, so section 13(2) of the IGST Act makes it the location of the recipient, the US business.1 With the client in the US, payment in dollars and no branch relationship, the conditions in section 2(6) are met and the service is zero-rated.2 If you are GST-registered, file a Letter of Undertaking (LUT) and invoice without IGST; see how to file an LUT.

Which purpose code and RBI steps apply?

DGFT maps accounting and bookkeeping services (SAC 998222) and payroll services (SAC 998223) to P1005, "Accounting, auditing, book keeping services".3 From 1 October 2026, file an Export Declaration Form (EDF) with your bank within 30 days from the end of the invoice month, or on or before the payment date.4 Each invoice must be realised within nine months of its date.5 Monthly retainers produce monthly EDFs, so set up a routine. See purpose code P1005.

Will US clients withhold US tax?

Generally not for work done in India. IRS Publication 515 says the place where personal services are performed determines the source of the income.8 An individual accountant gives clients Form W-8BEN; see Form W-8BEN for Indian freelancers.

How is the income taxed in India?

Accountancy is a specified profession under section 62(4) of the Income-tax Act, 2025.6 A resident individual or a firm other than an LLP can use Table row 3 of section 58(2), which deems 50% of gross receipts as profit for receipts up to ₹50 lakh, or ₹75 lakh if cash receipts are within 5%.7

Professional rules may also apply, both in the US and under your own institute's rules on practice, and they sit outside this page; if your engagement includes US tax filings or audit work, take a second opinion from a chartered accountant colleague who handles cross-border practice.

How did we verify this?

We checked this page against the sources below on 28 October 2026. Read our methodology or report an error.

  1. [1]CBIC: IGST Act, 2017, section 13 (place of supply where supplier or recipient is outside India)
  2. [2]CBIC: IGST Act, 2017, section 2 (definitions), clause (6)
  3. [3]DGFT: Purpose Code and SAC Code Mapping, Version 1.0, 10 November 2023
  4. [4]RBI: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification No. FEMA 23(R)/2026-RB, amended up to 22 September 2026 (regulations 3, 5 and 6)
  5. [5]RBI: Notification No. FEMA 23(R)/(1)/2026-RB dated 22 September 2026 (amendment to regulation 5)
  6. [6]Income Tax Department: Income-tax Act, 2025, section 62 (specified profession, sub-section (4))
  7. [7]Income Tax Department: Income-tax Act, 2025, section 58 (presumptive taxation, Table row 3)
  8. [8]IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities (checked 28 October 2026)

Frequently asked questions

Is payroll processing for a US client also P1005?+

DGFT maps payroll services (SAC 998223) to P1005 as well, alongside accounting and bookkeeping services (SAC 998222).3

Does US tax return preparation change the GST answer?+

Not by itself. Tax preparation for a client located abroad still falls under the default recipient-location rule in section 13(2).1

Can my partnership firm use the presumptive scheme?+

Table row 3 of section 58(2) covers resident individuals and firms other than LLPs carrying on a specified profession.7

What if a client pays less than the invoice?+

Regulation 6 lets your bank allow a reduction in export value; for invoices up to ₹10 lakh it can be on your declaration alone.4

This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.

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