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GST Registration Threshold and LUT: How to Get Paid Internationally Without the Headache

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Editorial team, serviceexportguide.com
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Short answer

In 2026, an inter-State service supplier with aggregate turnover up to ₹20 lakh is exempt from GST registration.1 Export turnover counts towards that threshold.2 A registered exporter files an LUT in FORM GST RFD-11 each financial year and invoices without IGST.34 Rule 96A makes IGST payable if payment arrives late.5

Applies toRules involvedPlatforms comparedLast verified
Indian freelancers and businesses exporting services to foreign clients6CGST Act sections 2(6), 22 and 25; Notification 10/2017-Integrated Tax; IGST Act section 16; CGST rule 96A278145Skydo, Razorpay, Karbon Business931 October 2026

GST worries put many freelancers and small agencies off international work, but for most exporters the rules come down to two questions: are you above the registration threshold, and if so, have you filed a Letter of Undertaking (LUT)? This page answers both, and shows which payment documents keep the GST side clean.

For registration step by step, read GST registration for freelancers who export and when a service export business needs GST registration. For the LUT itself, read how to file an LUT. Your facts decide the answer, so confirm your position with a chartered accountant (CA).

How do Skydo, Razorpay and Karbon Business compare for exporters handling GST?

Skydo, Razorpay and Karbon Business are the three lowest-cost providers on published fees for a USD 5,000 receipt, and they differ in the proof of payment and fee invoices they give for GST records.141516 The table lists them by estimated cost, cheapest first.

PlatformBest forFeeFX markupSettlementFIRARBI PA-CB statusSource
SkydoLocal bank transfers from major marketsUSD 19 plus GST up to USD 2,000; USD 29 plus GST to USD 10,000; 0.3% plus GST above0% markup on the mid-market rate (product page); retail rate set by Skydo or its partner banks (terms)Within 24 hours (product page); T+1 to T+3 business days (terms)Free FIRA on every payment, which Skydo says is accepted for GST filingAuthorised PA-CB-I and O, 8 January 202617141819932
RazorpayLocal transfers from the US, UK and eurozone1% per bank transfer plus GST; flat ₹1,000 below ₹1,00,000Razorpay says 0% on bank transfersT+1 for bank transfersFIRS emailed within 24 hours of settlementAuthorised PA-CB I and O2015219
Karbon BusinessUS bank transfers and marketplace payouts1% transaction fee on its comparison page0% on its freelancer page; 0.5% to 1.0% on its comparison pageKarbon says 24 to 48 hoursFIRA for every transaction from a banking partnerNot on the RBI list itself; its terms run export receipts under a partner the RBI lists as a PA-CB2216239

The payment platform does not change your GST position; it only changes the documents you keep, so compare others with the platform cost comparison.

Which GST rules govern international payments to Indian exporters?

International payments to Indian exporters are governed by the export of services test in section 2(6) of the IGST Act, the registration threshold in Notification No. 10/2017-Integrated Tax, and the LUT and rule 96A for registered exporters.6135

RuleBest for (who it applies to)Plain meaningSource
IGST Act, section 2(6)Every exporter of servicesSupplier in India, recipient and place of supply outside India, payment in convertible foreign exchange or permitted INR, and not two establishments of one person6
CGST Act, section 22Suppliers crossing the thresholdRegistration is due once aggregate turnover exceeds the threshold7
Notification No. 10/2017-Integrated TaxInter-State service suppliers up to ₹20 lakhExempt from registration; ₹10 lakh in special category States1
CGST Act, section 2(6)Exporters working out their turnoverAggregate turnover includes exports2
CGST Act, section 25(3)Exporters below the threshold who want an LUTVoluntary registration is allowed8
IGST Act, section 16Registered exportersExports are zero-rated; supply under LUT goes without IGST4
FORM GST RFD-11 and Circular No. 40/14/2018-GSTRegistered exportersLUT filed for each financial year and deemed accepted on ARN generation310
CGST Rules, rule 96A(1)(b)Exporters under an LUTIGST with interest due within 15 days if payment misses one year or the FEMA period, whichever is later5

The exporters who face real complications are usually those who miss the five conditions in section 2(6), not those near the threshold.6

What does each option charge, and is GST added to the fee?

Each option charges a published fee, and Skydo and Razorpay add GST to that fee, which a registered exporter may be able to claim as input tax credit.1415

PlatformBest forReceiving feeGST on the feeConversion to INRSource
SkydoLocal bank transfers from major marketsUSD 19 to USD 29 per payment up to USD 10,000Added0% markup on the mid-market rate (product page); retail rate set by Skydo or its partner banks (terms)14241832
RazorpayLocal transfers from the US, UK and eurozone1% per bank transferAddedRazorpay says 0% markup15
Karbon BusinessUS bank transfers and marketplace payouts1% listedNot published0% (freelancer page); 0.5% to 1.0% (PayPal alternative page)2216

Wise says 18% GST applies to its fees too, and PayPal adds 18% GST to custom FIRA charges.2526

Which option is cheapest at $500, $2,000 and $5,000?

The cheapest option at $500, $2,000 and $5,000 depends on the invoice size, because Skydo charges a fixed fee per band while Razorpay and Karbon charge a percentage.141516 The table works out INR received at today's rate from published fees.

PlatformBest forINR on USD 2,000INR on USD 5,000INR on USD 10,000Cost on USD 5,000
SkydoMost INRTransfer to Skydo local account details or international SWIFT accountLocal bank transfers from major markets₹1,86,373₹4,67,991₹9,39,2060.68%
Karbon BusinessBank transfer to a Karbon virtual USD accountUS bank transfers and marketplace payouts₹1,86,262 to ₹1,86,601₹4,65,655 to ₹4,66,503₹9,31,311 to ₹9,33,0071.00 to 1.18%
RazorpayMoneySaver Export Account: bank transfer to virtual account details (Standard plan)Local transfers from the US, UK and eurozone₹1,86,262 to ₹1,86,601₹4,65,655 to ₹4,66,503₹9,31,311 to ₹9,33,0071.00 to 1.18%

Ranked by INR received on USD 5,000. Reference rate: European Central Bank data for 13 November 2026. Fees, conversion markup, GST on fees and FIRA charges as published by each provider, checked 28 October 2026. Ranges appear where a provider publishes a range or does not state its GST rate. Intermediary bank charges are excluded. See the methodology.

For example, on USD 5,000 Skydo's USD 29 fee plus 18% GST is about 0.68% of the invoice, and Razorpay's 1% plus GST is 1.18%; the GST portion of each fee is the part a registered exporter may claim back.1415

What documents and GST steps keep international payments simple?

International payments stay simple when each one has an export invoice, a FIRA or e-FIRC, a self-certified e-BRC and an Export Declaration Form (EDF), plus an LUT for registered exporters.1327283

DocumentBest forWhat it doesSource
Export invoice with rule 46 endorsementRegistered exporters under LUTStates "supply meant for export ... under bond or letter of undertaking without payment of integrated tax", with recipient name, address and country13
LUT (FORM GST RFD-11)Registered exportersLets you invoice exports without IGST for the financial year3
FIRA or e-FIRCEvery exporterProves each foreign payment reached you182122
e-BRCEvery exporterSelf-certified on DGFT from the bank's IRM data27
EDFEvery service exporter from 1 October 2026Filed with the AD bank within 30 days from the end of the invoice month, or by the payment date for non-software services28
  • Unregistered exporters: Below the threshold, invoice without GST and keep the FIRA, e-BRC and EDF for the bank.128
  • Without LUT: A registered exporter can instead pay IGST and claim a refund; see export of services without LUT.4
  • Deadlines: Collect payment within nine months of the invoice to stay inside FEMA and rule 96A.115

The export invoice generator adds the rule 46 export wording to an invoice.13

What changes in 2026 for GST registration and LUT?

The 2026 changes that touch GST and the LUT are the omission of the intermediary place of supply rule from 30 March 2026, a GST Council recommendation on section 2(6), and the FEMA 2026 Regulations from 1 October 2026.293028

  • Intermediary services: Section 13(8)(b) of the IGST Act, 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 2026.29 See intermediary services under GST.
  • 57th GST Council: The meeting on 8 October 2026 recommended omitting condition (v) of section 2(6); this needs a law change and was not in force as of 28 October 2026.30
  • FEMA 2026 Regulations: In force from 1 October 2026, with an EDF for every service exporter.28
  • Realisation: Nine months from the invoice date, or twelve months in rupees, which feeds into rule 96A.115
  • Income tax: The Income-tax Act, 2025 applies from 1 April 2026.31

Read GST on export of services for zero-rating in full.

How did we verify this?

We checked this page against the sources below on 31 October 2026. Provider fees, conversion markups and RBI payment aggregator (PA-CB) status were checked on 28 October 2026. Rupee amounts use European Central Bank reference rates for 13 November 2026. Read our methodology or report an error.

  1. [1]Notification No. 10/2017-Integrated Tax (exemption from registration for inter-State suppliers of taxable services), GSTZen reproduction
  2. [2]CBIC: CGST Act, 2017, section 2, clause (6) (aggregate turnover)
  3. [3]GST Portal user guide: Furnishing of Letter of Undertaking (FORM GST RFD-11)
  4. [4]CBIC: IGST Act, 2017, section 16 (zero rated supply)
  5. [5]CBIC: CGST Rules, 2017, rule 96A (export under bond or Letter of Undertaking), clause (1)(b) as substituted by Notification No. 12/2024-Central Tax, 10 July 2024
  6. [6]CBIC: IGST Act, 2017, section 2, clause (6) (export of services)
  7. [7]CBIC: CGST Act, 2017, section 22 (persons liable for registration)
  8. [8]CBIC: CGST Act, 2017, section 25 (procedure for registration, including voluntary registration)
  9. [9]RBI: Certificates of Authorisation issued under the Payment and Settlement Systems Act, 2007, list dated 30 October 2026 (checked 2026-10-31)
  10. [10]CBIC Circular No. 40/14/2018-GST, 6 April 2018 (deemed acceptance of LUT on ARN generation)
  11. [11]RBI: Notification FEMA 23(R)/(1)/2026-RB dated 22 September 2026, amending regulation 5 (realisation period)
  12. [12]Notification No. 10/2023-Central Tax, 10 May 2023 (e-invoicing threshold of ₹5 crore from 1 August 2023), GST Council
  13. [13]CBIC: CGST Rules, 2017 (consolidated), rule 46 (tax invoice, export endorsement)
  14. [14]Skydo FAQs, How much does Skydo charge? (checked 2026-10-28)
  15. [15]Razorpay, Multi-Currency Account for International Bank Transfers (MoneySaver Export Account pricing) (checked 2026-10-28)
  16. [16]Karbon Business, PayPal Alternative comparison page (checked 2026-10-28)
  17. [17]Skydo FAQs, What countries can I get paid locally through Skydo? (checked 2026-10-28)
  18. [18]Skydo, Receive international payments as a freelancer in India (product page) (checked 2026-10-28)
  19. [19]Skydo FAQs, What is accepted for GST filings and banks between FIRA and FIRC? (checked 2026-10-28)
  20. [20]Razorpay Docs, International Bank Transfer (MoneySaver Export Account) (checked 2026-10-28)
  21. [21]Razorpay Docs, FIRS Automated Process (checked 2026-10-28)
  22. [22]Karbon Business, Karbon for Freelancers (checked 2026-10-28)
  23. [23]Karbon Forex Terms and Conditions, Interropac Private Limited (checked 2026-10-28)
  24. [24]Skydo, home page fee table (checked 2026-10-28)
  25. [25]Wise Help Centre, Receiving payments for Indian businesses (checked 2026-10-28)
  26. [26]PayPal India, Foreign Inward Remittance Advise (FIRA) (checked 2026-10-28)
  27. [27]DGFT: eBRC system, self-certification of eBRC from bank inward remittance messages (IRMs), Trade Notice 33/2023-24 dated 10 November 2023
  28. [28]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, 4, 5 and 19
  29. [29]Finance Act, 2026, section 157 (omission of IGST Act section 13(8)(b)), Gazette of India
  30. [30]GST Council: press release on the 57th GST Council meeting, 8 October 2026
  31. [31]PIB: Income-tax Act, 2025 comes into force from 1 April 2026
  32. [32]Skydo, Terms of Use, last updated 9 April 2026 (checked 2026-10-28)

Frequently asked questions

How can I receive international payments without GST complications?+

Keep each foreign payment inside the export of services rules: client outside India, place of supply outside India and payment in convertible foreign exchange.6 Below ₹20 lakh turnover registration is not compulsory for inter-State services.1 Once registered, file an LUT each year and invoice exports without IGST.3

Do export earnings count towards the ₹20 lakh GST threshold?+

Yes. Aggregate turnover under section 2(6) of the CGST Act includes exports of services, so foreign client income counts towards the ₹20 lakh threshold.21 A freelancer earning only from foreign clients can still cross the threshold and need registration. The limit is ₹10 lakh in special category States.1

Can I file an LUT without GST registration?+

No. The LUT is filed in FORM GST RFD-11 on the GST portal by a registered person, under Services, User Services, Furnish Letter of Undertaking.3 An unregistered exporter below the threshold does not charge GST at all, so an LUT is only needed after registration.1

Is the LUT accepted immediately on the GST portal?+

CBIC Circular No. 40/14/2018-GST says an LUT is deemed accepted as soon as the ARN (application reference number) is generated on the portal.10 File it before the first export invoice of each financial year, because the LUT covers one financial year at a time.3

What happens if my foreign client pays late under an LUT?+

Under rule 96A(1)(b) of the CGST Rules, IGST with interest becomes payable within 15 days if payment is not received within one year of the invoice date or the FEMA period including any RBI extension, whichever is later.5 FEMA sets nine months from the invoice date for services.11

Should I register for GST voluntarily as an exporter?+

Section 25(3) of the CGST Act allows voluntary registration below the threshold.8 Registration lets you file an LUT and may let you claim input tax credit on GST paid on platform fees and business costs.34 It also brings monthly or quarterly returns, so weigh the effort with a chartered accountant.

Do I need e-invoicing for export invoices?+

E-invoicing applies to registered persons whose aggregate turnover exceeds ₹5 crore, from 1 August 2023 under Notification No. 10/2023-Central Tax.12 Smaller exporters issue a normal tax invoice with the rule 46 export endorsement, the recipient's name and address and the country of destination.13

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

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Do freelancers with foreign clients need GST registration?

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When an exporting agency, firm, LLP or company must register for GST, why exports count towards the threshold, how State-wise registration works and what follows.

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How do you file an LUT for export of services on the GST portal?

Step-by-step guide to filing a Letter of Undertaking in FORM GST RFD-11 for export of services: eligibility, validity, late filing and the ARN on invoices.

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