Do exporters pay GST on payment gateway charges?
- Verified by:
- Editorial team
- Published
- Last modified
- Reading time
- 7 min read
Short answer
A payment gateway in India charging an Indian exporter a fee makes a domestic supply, so GST is added to the fee.34 Razorpay lists GST at 18% on its platform fee.1 A GST-registered exporter can claim that GST as input tax credit under section 16 of the IGST Act.3 Fees from a gateway outside India are taxed under reverse charge.45
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Indian exporters paying fees to a gateway in India | IGST Act sections 2(6) and 1634 | Not applicable | Not applicable | 28 October 2026 |
| Indian exporters paying fees to a platform located outside India | IGST Act section 2(11); Notification No. 10/2017-Integrated Tax (Rate), entry 145 | Not applicable | Not applicable | 28 October 2026 |
| Card settlements up to ₹2,000 in a single transaction | Notification No. 9/2017-Integrated Tax (Rate), entry 356 | Not applicable | Not applicable | 28 October 2026 |
When a client in London pays an Indian consultant by card, or a subscriber in Sydney renews a plan with an Indian SaaS company, a payment gateway or platform usually sits in the middle and keeps a fee. Exporters are often surprised to see GST on that fee, because the sale itself carries no GST.13
This guide explains why GST applies to gateway charges, how a registered exporter recovers it, what changes when the platform is located abroad, and what it means for the export paperwork. The position is stated as of 28 October 2026.3
What is GST on payment gateway charges?
GST on payment gateway charges is tax on the gateway's fee, which is a separate supply of a service by the gateway to the exporter; when the gateway and the exporter are both in India, that supply is domestic.34 Your export to the foreign customer is zero-rated under section 16 of the Integrated Goods and Services Tax (IGST) Act, but the zero-rating applies to your outward supply only, not to the services you buy to make it.3
Two separate supplies are involved, under sections 2(6) and 16 of the IGST Act:34
- Your export: the design, software or consulting service from you (in India) to the foreign client is zero-rated if section 2(6) is met.34
- The gateway's service: the payment processing service from the gateway (in India) to you is taxable, with GST on the fee.34
The GST appears on the gateway's tax invoice to you, not on your invoice to the client.
Who pays GST on payment gateway charges?
Every exporter who pays a gateway fee bears GST on that fee, but how it is charged and whether it can be recovered depends on where the gateway is and whether the exporter is registered.345
| Exporter and gateway | GST on the fee? | Why | Best for |
|---|---|---|---|
| Registered exporter, gateway in India | Yes, recoverable as credit | Domestic supply; section 16(2) allows credit for making zero-rated supplies3 | GST-registered exporters taking card payments |
| Unregistered exporter, gateway in India | Yes, a cost | No registration to claim credit against3 | Freelancers under the registration threshold with a few foreign clients |
| Registered exporter, platform outside India | Yes, under reverse charge | Import of services under section 2(11); entry 1 of Notification No. 10/2017-Integrated Tax (Rate)45 | Exporters paid through foreign platforms |
| Unregistered exporter, platform outside India | Unclear | Reverse charge can apply to unregistered recipients for services that are not online information and database access or retrieval services, and section 24(iii) of the CGST Act requires persons liable under reverse charge to register458 | Confirming the position with a chartered accountant |
For a freelancer under the registration threshold billing a few foreign clients, the GST on fees is usually a small cost, but it is worth knowing when comparing collection methods.
How does a registered exporter recover GST on payment gateway fees?
A registered exporter recovers GST on payment gateway fees as input tax credit. Section 16(2) of the IGST Act allows credit of input tax for making zero-rated supplies, even though a zero-rated supply may otherwise look like an exempt supply.3
- Give the gateway your GSTIN: so its tax invoice is issued to your registration.
- Download the monthly tax invoice: from the gateway dashboard.
- Check the credit: confirm it appears against the gateway in your GST credit statement before claiming it.
- Use or refund the credit: use it against GST on domestic sales, or, if you export under a Letter of Undertaking (LUT) and the credit accumulates, claim a refund of unutilised input tax credit under section 16(3).3 See refund of ITC on zero-rated supplies.
For example, say a registered video editor in Kerala receives client payments on a marketplace whose payout fee is billed by a company abroad: the editor accounts for reverse charge on that fee and claims the IGST back as credit.5 See reverse charge on imported SaaS tools and services.
What GST rules and exemptions apply to payment gateway charges?
The GST rules for payment gateway charges depend on where the gateway is located and, for small card payments, the size of the transaction.456
| Rule | What applies | Best for |
|---|---|---|
| Gateway in India | GST on the fee as a domestic supply34 | Exporters using Indian gateways |
| Platform outside India | Import of services under section 2(11) of the IGST Act; IGST under reverse charge under entry 1 of Notification No. 10/2017-Integrated Tax (Rate)45 | Exporters using foreign platforms |
| Small card settlements | Entry 35 of Notification No. 9/2017-Integrated Tax (Rate) exempts services "by an acquiring bank, to any person in relation to settlement of an amount up to two thousand rupees in a single transaction transacted through credit card, debit card, charge card or other payment card service"6 | Low-value card payments |
Entry 35 defines an acquiring bank to include any banking company, financial institution, non-banking financial company "or any other person" who pays the person accepting the card.6 Whether a given gateway applies this exemption to small card payments, and how it treats foreign-currency card payments under it, is the gateway's call; check its invoice. We could not find a gateway pricing page that states this for international cards.16
What happens if an exporter deducts the gateway fee from the export invoice?
If an exporter deducts the gateway fee from the export invoice, the invoice no longer shows the price agreed with the customer. The invoice should show the agreed price, and the gateway fee is a cost booked separately with its own GST.3 The rupee amount credited to you will be lower than the invoice because of the fee.
- FEMA realisation: the authorised dealer bank tracks realisation of the full export value.7
- Reduction in export value: regulation 6 of the FEMA (Export and Import of Goods and Services) Regulations, 2026 lets the bank allow a reduction in export value, on declaration alone for invoices up to ₹10 lakh or equivalent.7
- EDF reporting: how fees deducted by gateways are reported against an Export Declaration Form is not spelt out in the regulations; ask your bank or gateway how they report it.7
For the conversion side of the same payment, see GST on foreign currency conversion.
How is GST on a payment gateway fee calculated?
GST on a payment gateway fee is calculated on the fee only, at the rate shown on the gateway's tax invoice, not on the transaction amount.1 Razorpay's pricing page says GST "applies on Razorpay's service fee, not on the underlying transaction amount".1
For example, say a consultant receives an international card payment through Razorpay at its published platform fee of up to 3% per successful transaction. GST at 18% on that fee adds up to 0.54% of the transaction (18% of 3%), so the fee plus GST is up to 3.54% of the payment.1 A registered consultant can claim the GST part back as credit.3
The gateways named on this page publish their fees and tax treatment as follows, listed in order of estimated cost on published fees, with providers lacking full published pricing after:
| Gateway | Published fee and GST statement | Best for |
|---|---|---|
| Razorpay | International cards: "up to 3% per successful transaction"; GST on the platform fee is 18%1 | Local transfers from the US, UK and eurozone9 |
| Stripe India | 3% for Mastercard and Visa cards issued outside India, plus 2% if currency conversion is required; says Stripe "is required to charge tax on certain products and services" but does not state a GST rate2 | Card checkout and subscriptions10 |
Fees and tax treatment change, so read the current pricing page and your monthly tax invoice. See accepting international card payments in India for a fuller comparison.
What are the common mistakes with GST on payment gateway charges?
The common mistakes with GST on payment gateway charges come from treating the gateway fee as part of the export.34
- Expecting zero-rating on the fee: the zero-rating covers your outward supply only.3
- Missing GSTIN: without your GSTIN, the gateway's invoice is not issued to your registration.
- Ignoring reverse charge: fees from a platform outside India are an import of services.45
- Netting the fee off the invoice: the invoice shows the agreed price; the fee is a separate cost.3
- Assuming the small-card exemption applies: check the gateway's invoice for how it treats entry 35.6
Check the gateway's monthly tax invoice before you file each return.
How did we verify this?
We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.
- [1]Razorpay: Pricing (checked 28 October 2026)
- [2]Stripe India: Pricing (checked 28 October 2026)
- [3]CBIC: IGST Act, 2017, section 16 (zero rated supply), sub-sections (2) and (3)
- [4]CBIC: IGST Act, 2017, section 2 (definitions, clauses (6), (11) and (16))
- [5]GST Council: Notification No. 10/2017-Integrated Tax (Rate), 28 June 2017, updated version as amended up to 1 April 2019, entry 1
- [6]ICAI GST & Indirect Taxes Committee: Notification No. 9/2017-Integrated Tax (Rate), updated up to Notification 16/2025-Integrated Tax (Rate), entry 35 (reproduction)
- [7]RBI: FEMA (Export and Import of Goods and Services) Regulations, 2026, Notification No. FEMA 23(R)/2026-RB, regulation 6
- [8]CBIC: CGST Act, 2017 (as amended up to 31 August 2021), section 24(iii)
- [9]Razorpay Docs, International Bank Transfer (MoneySaver Export Account) (checked 2026-10-28)
- [10]Stripe Docs, Accept international payments from India (checked 2026-10-28)
Frequently asked questions
Why is GST charged on a gateway fee when the sale is an export?+
GST is charged on a gateway fee when the sale is an export because the gateway's fee is a separate supply from the gateway to the exporter, and both are in India.34 The zero-rating of the export to the foreign customer under section 16 of the IGST Act does not extend to services the exporter buys to make it.3
Can an exporter claim GST on payment gateway fees as input tax credit?+
A GST-registered exporter can generally claim GST on payment gateway fees as input tax credit. Section 16(2) of the IGST Act allows credit for making zero-rated supplies, and section 16(3) allows a refund of unutilised credit on supplies made under an LUT.3 An unregistered exporter cannot claim the credit, so the GST stays a cost.
What GST rate do payment gateways in India charge on their fees?+
The GST rate on payment gateway fees is shown on each provider's pricing page and tax invoice. Razorpay's pricing page lists GST at 18% on its platform fee and says GST applies on Razorpay's service fee, not on the underlying transaction amount.1 Stripe India's pricing page does not state a GST rate.2
Is GST payable on fees charged by a foreign payment platform?+
GST is payable on fees charged by a foreign payment platform when the exporter is in India and the place of supply is in India, because the fee is an import of services under section 2(11) of the IGST Act.4 A registered exporter pays IGST under reverse charge under entry 1 of Notification No. 10/2017-Integrated Tax (Rate).5
Are small card payments exempt from GST on gateway charges?+
Small card payments may be exempt from GST on gateway charges. Entry 35 of Notification No. 9/2017-Integrated Tax (Rate) exempts services by an acquiring bank in relation to settlement of an amount up to ₹2,000 in a single card transaction.6 Whether a gateway applies this to foreign-currency card payments is the gateway's call, so check its invoice.
Does an unregistered exporter need to register because of foreign platform fees?+
An unregistered exporter paying fees to a foreign platform is in a less clear position. Reverse charge can apply to unregistered recipients for services that are not online information and database access or retrieval services, and section 24(iii) of the CGST Act requires persons liable under reverse charge to register.458 Confirm this with a chartered accountant.
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.
Keep reading
How is GST charged on foreign currency conversion of export receipts?
How GST is worked out when a bank converts an exporter's foreign currency receipt to rupees: the rule 32(2) value, the slab option, worked examples and input tax credit.
GSTDo you pay GST under reverse charge on foreign SaaS tools and services?
When an Indian freelancer or agency pays IGST under reverse charge on foreign software subscriptions and services, and when the foreign supplier charges GST instead.
GSTHow is the refund of unutilised ITC calculated for export of services?
How exporters of services under an LUT calculate the refund of unutilised input tax credit under rule 89(4): each term defined, a worked example, and 2026-27 changes.
PaymentsHow can an Indian business accept international card payments?
How Indian exporters accept Visa, Mastercard and Amex cards from foreign clients: RBI PA-CB rules, published card fees by provider, eligibility, settlement and FIRA.
GlossaryWhat is a payment gateway?
RBI defines a payment gateway as technology that routes and processes a payment without handling funds. How it differs from a payment aggregator or PA-CB for exporters.