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What compliance checklist should an Indian agency follow when exporting services?

Author:: Editorial team, serviceexportguide.com
Verified by:: Editorial team
Published: 28 October 2026
Last modified: 30 October 2026
Reading time: 8 min read

Short answer

An Indian agency's export engagements must meet the five conditions in section 2(6) of the IGST Act.¹ The agency files an LUT for every financial year.⁸ E-invoicing applies once aggregate turnover exceeds ₹5 crore.³ From 1 October 2026 the agency files an EDF within 30 days of each invoice month end.⁴ Each invoice must be realised within nine months.⁵

Applies to	Governed by	Deadline	Penalty	Last verified
Indian agencies billing foreign clients: marketing, design, content, video, development and consulting¹⁴	IGST Act, section 2(6); CGST Rules, rules 46 and 96A; FEMA 2026 Regulations, regulations 3, 5, 7 and 13¹²¹⁴⁴	LUT before the year's first export; EDF within 30 days of month end; realisation within nine months of the invoice date⁸⁴⁵	Unrealised for over a year past due: further exports only against full advance or an irrevocable letter of credit (regulation 13)⁴	28 October 2026

An agency exporting services faces the same core rules as a solo freelancer, but at a scale where gaps get expensive: more invoices, more currencies, several service lines, subcontractors, and often a turnover that brings in extra GST requirements. This checklist is for digital marketing, design, content, video, development and consulting agencies with foreign clients, as of October 2026.⁴

Use it to check your set-up once, then at the start of each financial year.

What is an export of services checklist for agencies?

An export of services checklist for agencies is a list of the GST, foreign exchange, payment and income tax steps an Indian agency follows for each foreign engagement, from the export test to the yearly review.¹⁴

Export test: all five conditions in section 2(6) of the IGST Act.¹
GST: LUT, rule 46 invoices, e-invoicing above ₹5 crore and refund records.⁸²³¹⁵
Foreign exchange: EDF, realisation, set-off and the one-year rule under the FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations).⁴⁵
Income tax: structure, advance tax and US tax forms.¹³¹¹¹²

Which agency engagements qualify as an export of services?

An agency engagement qualifies as an export of services only if all five conditions in section 2(6) of the IGST Act are met: the agency is in India, the client is outside India, the place of supply is outside India, payment is in convertible foreign exchange (or rupees where RBI permits), and the agency and client are not merely establishments of the same person.¹

Intermediary work: if you arrange services between a foreign client and other suppliers, note that section 13(8)(b), which set the place of supply of intermediary services at the supplier's location, was omitted by section 157 of the Finance Act, 2026 from 30 March 2026.⁶ See intermediary services under GST.
Services tied to India: events, shoots or on-site work in India can have special place-of-supply rules. See place of supply for export of services.

Who does the export of services checklist for agencies apply to?

The export of services checklist applies to every Indian agency with foreign clients, and the agency's structure and group links change some of the answers.⁷¹³

Agency structure	Applicable points	Why	Best for
Partnership firm in a specified profession	Presumptive tax under section 58(2), Table row 3 may be available	Row 3 covers resident individuals and partnership firms (not LLPs) in specified professions¹³	Small professional partnerships
LLP or company	Tax on actual profit; Form W-8BEN-E for US clients	Row 3 excludes LLPs; entities give W-8BEN-E¹³¹²	Most agencies
Indian subsidiary supplying its foreign parent	Can be an export if other conditions are met	Not merely an establishment of a distinct person (Circular 161/17/2021-GST)⁷	Group agencies
Indian branch supplying its foreign head office	Not an export	Merely an establishment of a distinct person⁷	Branch set-ups
Agency with aggregate turnover above ₹5 crore	E-invoicing on export invoices	Notification No. 10/2023-Central Tax³	Larger agencies

Review this table whenever your structure or turnover changes.

How does an agency run the export of services checklist?

An agency runs the export of services checklist by testing each engagement, setting up GST, filing the monthly EDF and tracking each invoice to realisation.¹⁴⁸

Test: confirm each engagement meets the five conditions in section 2(6) of the IGST Act.¹
LUT: file the Letter of Undertaking (LUT) in FORM GST RFD-11 for each financial year, before the first export of the year.⁸¹⁴ See LUT renewal and validity.
Invoices: issue rule 46 export invoices, with the export endorsement and the client's country of destination.² See the export invoice format.
E-invoicing: add e-invoicing once aggregate turnover exceeds ₹5 crore.³ See e-invoicing for export of services.
EDF: file one EDF with the AD bank within 30 days from the end of each invoice month.⁴ See EDF for service exporters.
Realisation: track each invoice against its nine-month deadline.⁵
Purpose codes: use the code that matches each invoice's service.⁹
Advance tax: pay by 15 June, 15 September, 15 December and 15 March.¹¹
Review: review the set-up yearly with a chartered accountant, especially after turnover crosses a GST or audit threshold.

What documents, deadlines and limits apply to an exporting agency?

The documents, deadlines and limits for an exporting agency come mainly from the 2026 Regulations, which apply from 1 October 2026.⁴

Obligation	Rule	What to set up	Best for
Export Declaration Form (EDF)	Within 30 days from the end of the month of invoicing; one EDF can cover a month's exports to several clients	A monthly EDF routine with your AD bank	Every agency
Realisation	Nine months from invoice date, twelve if in rupees	An invoice tracker with deadlines	Every agency
Set-off	AD bank can allow set-off against import payables with the same overseas party or its group	Ask the bank before netting	Agencies that also buy from a client group
Unrealised for over one year past due	Further exports only against full advance or an irrevocable letter of credit	Escalate overdue invoices early	Agencies with slow payers
Refund records	Rule 89 statement of invoices with matching realisation or remittance certificates	A file matching invoices to certificates	Agencies claiming ITC refunds

The table summarises regulations 3, 5, 7 and 13 of the 2026 Regulations, as amended, and rule 89 of the CGST Rules.⁴⁵¹⁵ See GST refunds for export of services.

Agencies often buy software and services from abroad for their own use. These can attract GST under reverse charge. See reverse charge on imported services and SaaS tools.

How should an agency handle purpose codes across service lines?

An agency should use the purpose code that matches each invoice's service, and a full-service agency may use several codes in one month.⁹

Code	Description in RBI's list	Best for
P1007	Advertising, trade fair, market research and public opinion polling⁹	Advertising and media agencies
P1006	Business and management consultancy and public relations⁹	Consulting and PR agencies
P0802	Software consultancy and implementation⁹	Development agencies
P1101	Audio-visual and related services⁹	Video and production studios

See purpose codes for digital marketing services and the purpose code finder.

How should an agency collect payments from foreign clients?

An agency typically collects payments from foreign clients by combining bank wires for large retainers with card or local collection for smaller clients. If you use a cross-border payment aggregator (PA-CB), RBI's Master Direction caps export transactions at ₹25 lakh per transaction.¹⁰ Compare providers on published fees, settlement time and inward remittance documents. See payment platforms for agencies and international payments for digital marketing agencies.

What income tax points matter for an exporting agency?

The income tax points that matter for an exporting agency start with its structure: presumptive taxation under section 58(2), Table row 3 of the Income-tax Act, 2025 is for resident individuals and partnership firms (not LLPs) in specified professions, so many agencies, especially LLPs and companies, compute tax on actual profit.¹³

Advance tax: due in four instalments, by 15 June, 15 September, 15 December and 15 March, under section 408.¹¹ See advance tax for freelancers and tax audit for freelancers.
US clients: an Indian agency that is an entity gives Form W-8BEN-E.¹² See W-8BEN-E for Indian companies.
Foreign withholding: if a client withholds tax abroad, see foreign withholding tax.

What happens if an agency misses an export compliance step?

An agency that misses an export compliance step can lose the LUT route for that export or face limits on future exports.¹⁴⁴

No LUT: the LUT must be in place before the export under rule 96A.¹⁴
Unpaid invoices: if proceeds stay unrealised for more than one year past the due date, further exports are only against full advance or an irrevocable letter of credit (regulation 13).⁴
Netting without approval: set-off against import payables needs the AD bank's permission under regulation 7.⁴

See what to do when a foreign client is not paying.

What is the compliance timeline for an exporting agency?

The compliance timeline for an exporting agency runs on a yearly, monthly and per-invoice cycle.⁸⁴⁵¹¹

Cycle	Item	Date	Best for
Yearly	LUT in FORM GST RFD-11	Before the first export of each financial year⁸¹⁴	Every agency exporting without IGST
Quarterly	Advance tax	15 June, 15 September, 15 December, 15 March¹¹	Every taxpaying agency
Monthly	EDF	Within 30 days from the end of the invoice month⁴	Every agency
Per invoice	Realisation	Nine months from the invoice date, twelve if in rupees⁵	Tracking each client

For dates through the year, see the export compliance calendar.

What are the common mistakes in an agency's export compliance?

The common mistakes in an agency's export compliance come from scale: many invoices, entities and service lines.²⁵⁹

Wrong contracting party: contract with the entity that pays, and name it on the invoice.
No advances for new clients: use milestones or retainers with advances. See milestone payments and retainer billing.
Mixed invoice series: keep a separate export invoice series and one tracker of realisation deadlines.²⁵
One purpose code for everything: use the code that matches each invoice's service.⁹
Undocumented subcontracting: record who did the work, where, and on what terms.

For any change in structure or turnover, review the set-up with a chartered accountant.

How did we verify this?

We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.

Frequently asked questions

Does an agency that connects foreign clients with Indian freelancers still face the intermediary rule?+

Section 13(8)(b) of the IGST Act, which put the place of supply of intermediary services at the supplier's location, was omitted by section 157 of the Finance Act, 2026 from 30 March 2026.⁶ An agency's intermediary services now follow the general place-of-supply rules, so test each engagement against the five export conditions.

When does an exporting agency need e-invoicing for export invoices?+

An exporting agency needs e-invoicing for its export invoices when its aggregate turnover exceeds ₹5 crore, from 1 August 2023 under Notification No. 10/2023-Central Tax.³ Below that threshold, the agency issues ordinary rule 46 export invoices with the export endorsement and country of destination.²

Which purpose code does a marketing agency use for export receipts?+

The purpose code a marketing agency uses depends on the service invoiced. RBI's list includes P1007 for advertising, trade fair, market research and public opinion polling, and P1006 for business and management consultancy and public relations.⁹ Use the code that matches each invoice, even if that means several codes a month.

Can an Indian agency bill its own overseas parent company as an export?+

CBIC Circular 161/17/2021-GST says an Indian subsidiary supplying its foreign parent is not merely an establishment of a distinct person, while a branch supplying its head office is.⁷ A subsidiary agency can therefore treat the supply as an export if the other conditions in section 2(6) of the IGST Act are met.¹

What US tax form does an Indian agency give a US client?+

An Indian agency that is an entity gives a US client Form W-8BEN-E, the entity version, rather than the individual Form W-8BEN.¹² The US client keeps the agency's Form W-8BEN-E on file, so send it before the first invoice to avoid payment delays.

Is there a per-transaction limit when an agency collects through a payment aggregator?+

Yes. If an agency uses a cross-border payment aggregator (PA-CB), RBI's Master Direction on Regulation of Payment Aggregator caps export transactions at ₹25 lakh per transaction.¹⁰ Large retainers above that limit usually go by bank wire, while smaller invoices can go through card or local collection.

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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