Invoicing

How should Indian exporters bill foreign clients on retainers and subscriptions?

Author:: Editorial team, serviceexportguide.com
Verified by:: Editorial team
Published: 28 October 2026
Last modified: 30 October 2026
Reading time: 7 min read

Short answer

Each retainer or subscription invoice to a foreign client has its own nine-month realisation deadline.¹² For contracts over three months with periodic payments, section 31(5) of the CGST Act ties each invoice to the payment due date.³ A prepaid retainer is an advance receipt, routed through the same AD bank as the realisation under regulation 10.¹

Applies to	Governed by	Deadline	Penalty	Last verified
GST invoice for a retainer over three months	CGST Act, sections 2(33) and 31(5)³	On or before the payment due date fixed in the contract³	Not applicable	28 October 2026
GST invoice for shorter arrangements	CGST Rules, rule 47⁴	Within 30 days from the date of supply⁴	Not applicable	28 October 2026
Prepaid retainers (advance receipts)	FEMA (Export and Import of Goods and Services) Regulations, 2026, regulation 10(1)¹	Not applicable	Not applicable	28 October 2026
Realisation of each invoice	Regulation 5 as amended on 22 September 2026²	Nine months from the invoice date; twelve months for rupee invoices²	Not applicable	28 October 2026
Payment for exports under an LUT	CGST Rules, rule 96A⁷	One year from the invoice date, or the FEMA period if later⁷	Integrated tax payable with interest⁷	28 October 2026

Retainers and subscriptions turn one-off projects into predictable income. A content agency billing a US brand every month, a fractional CFO on a quarterly fee for a Singapore start-up, and a SaaS company charging foreign users monthly all use the same building block: a repeating invoice for a repeating service. Indian rules treat each of those invoices as an export of services, so the realisation and GST rules apply to each one.¹⁶

For the mechanics of numbering and monthly filing, see recurring international invoices.

What is retainer and subscription billing for exports?

Retainer and subscription billing for exports is a repeating invoice to a foreign client for a repeating service, where every invoice is a separate export with its own realisation deadline.² Exporters use four common recurring billing models, and the choice of model is commercial.

Model	Billing pattern	Example	Best for
Prepaid retainer	Fixed fee paid at the start of each month for reserved capacity	A design studio reserving 40 hours a month for a client	Studios that want cash before work starts
Retainer in arrears	Fixed fee billed after each month of service	A bookkeeper closing a UK client's books monthly	Clients who pay only for delivered work
Hybrid	Base fee plus overage billed at the end of the month	A support desk with included tickets plus extra tickets	Variable workloads with a predictable base
Subscription	Fixed recurring charge for access to a product or service	A SaaS tool billing foreign users monthly or annually	Product businesses with many customers

Each model generates a series of invoices, and each invoice starts its own nine-month realisation clock from 1 October 2026.²

Who do the retainer and subscription billing rules apply to?

The retainer and subscription billing rules apply to any Indian service exporter that bills a foreign client on a repeating basis, and which GST timing rule applies depends on contract length.³⁴

Exporter type	Applicable	Why	Best for
Agency on a contract over three months	Section 31(5) of the CGST Act	A continuous supply of services under section 2(33)³	Content, design and marketing retainers
Consultant on a shorter arrangement	Rule 47 of the CGST Rules	Invoice within 30 days from the date of supply⁴	Short engagements
SaaS company with card subscriptions	PA-CB limit and export conditions	PA-CBs are capped at ₹25 lakh per transaction⁵	Many small foreign customers
Exporter supplying under an LUT	Rule 96A	Payment deadline for each LUT invoice⁷	Registered exporters billing without IGST

Every invoice needs the rule 46 particulars and, for a registered supplier, the export endorsement.⁴ See the export invoice format.

How do you bill foreign clients on retainers and subscriptions?

You bill foreign clients on retainers and subscriptions by choosing the model, fixing invoice dates under GST rules, routing advances correctly and filing the monthly EDF.¹³

Choose the model: pick one of the four models above and record it in the contract.
Fix the invoice date: for a contract running more than three months with periodic payment obligations, section 31(5) of the CGST Act sets the invoice date; shorter arrangements fall under rule 47.³⁴
Route advances through one bank: regulation 10(1) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations) requires the advance and the later realisation to be routed through the same authorised dealer (AD) bank, unless the change is intimated to both banks.¹
Choose the collection method: bank transfer, or card through a cross-border payment aggregator.⁵
File the EDF: from 1 October 2026, every service exporter files an Export Declaration Form (EDF) with its AD bank within 30 days from the end of the month in which the invoice was raised, and one EDF can cover a month's exports to multiple recipients.¹

Section 31(5) sets the invoice date for a continuous supply as follows.³

Fixed due date: if the contract fixes a payment due date, the invoice is issued on or before that date.³
No due date: if it does not, the invoice is issued before or when the payment is received.³
Event-linked: if payment is tied to completing an event, the invoice is issued on or before that event is completed.³

Exporters of non-software services may instead file the EDF on or before the date payment is received.¹ A subscription business with many small foreign customers should ask its bank how it wants monthly exports declared. See EDF for service exporters and EDF waiver for low-value exports.

How do prepaid retainers and annual subscriptions fit the advance payment rules?

Prepaid retainers and annual subscriptions fit the advance payment rules as advance receipts: the client pays before you supply the service, so regulation 10(1) applies.¹ Keep the agreement showing what the advance covers. See advance payment against exports.

Annual upfront fee: an annual subscription paid upfront is an advance for twelve months of service, and the realisation deadline runs from the invoice date, so an upfront invoice paid on time raises no realisation issue.²
GST on advances: see GST on advances from foreign clients, and check your approach with a chartered accountant.

What payment deadlines apply to retainer and subscription invoices?

The payment deadlines for retainer and subscription invoices are the FEMA realisation period of nine months from each invoice date and, for exports under an LUT, the rule 96A deadline.²⁷

Deadline	Rule	Period	Best for
FEMA realisation	Regulation 5 as amended²	Nine months from the invoice date; twelve months for rupee invoices²	All foreign-currency retainers
LUT payment	Rule 96A⁷	One year from the invoice date, or the FEMA period including any RBI-permitted extension if later, or a further period the Commissioner allows⁷	Registered exporters supplying without IGST
EDF	Regulation 3 of the 2026 Regulations¹	30 days from the end of the month of invoicing¹	Monthly filing for all exporters

If payment under an LUT misses the rule 96A deadline, the integrated tax becomes payable with interest.⁷ A retainer contract usually states the fee and currency, billing in advance or arrears, invoice and payment dates, unused hours, notice period, and refund terms on cancellation; keep the payment due date well inside nine months of each invoice.² See payment terms in freelance contracts and export payment terms.

What happens if a retainer or subscription is cancelled or refunded?

If a retainer or subscription is cancelled and part of the fee is refunded, the realised amount differs from what you invoiced or received, and your AD bank can allow a reduction in export value under regulation 6.¹

Partial refund of an annual fee: discuss the treatment with your AD bank.¹
Mid-month cancellation: follow the contract, then speak to the bank about the refund or a reduction.¹
Card chargebacks: card collections bring chargeback risk, so keep usage logs and delivery evidence. See chargebacks.

Which collection methods suit retainers and subscriptions?

Retainers and subscriptions can be collected by bank transfer or by card, and many SaaS companies and some agencies collect recurring fees by card or local payment methods through a cross-border payment aggregator (PA-CB).⁵ RBI regulates PA-CBs under its Master Direction on Regulation of Payment Aggregator dated 15 September 2025, which caps export transactions at ₹25 lakh per transaction.⁵

Method	How it works	Limit or risk	Best for
Bank transfer	Client pays each invoice to your account details	Realisation tracked per invoice²	Agencies and consultants with a few large clients
Card through a PA-CB	Client's card is charged on a schedule	₹25 lakh per transaction; chargeback risk⁵	SaaS tools with many small customers

Online services sold to foreign customers may fall under specific place-of-supply rules, and whether each customer is outside India matters for the export conditions in section 2(6) of the IGST Act.⁶ See PA-CB transaction limits, accepting international card payments, GST on SaaS sold to foreign customers and OIDAR services under GST.

What are the common mistakes with retainer and subscription billing?

The common mistakes with retainer and subscription billing are invoicing on the wrong date, splitting advances across banks, and letting long payment terms run past the realisation period.¹²³

Wrong invoice date: for a continuous supply, the invoice is due on or before the payment due date.³
Advances through a different bank: regulation 10(1) expects one AD bank unless both banks are told.¹
Long payment terms: a due date close to nine months leaves no room for delay.²
No delivery evidence for card subscriptions: chargebacks are harder to contest without usage logs.

For example, a fractional CFO billing a Singapore start-up quarterly in arrears under a one-year contract issues each invoice on or before the payment due date in the contract, because the contract runs more than three months with periodic payments.³

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

Is a prepaid monthly retainer from a foreign client an advance payment?+

A prepaid monthly retainer from a foreign client is an advance payment, because the money arrives before the service is supplied. Regulation 10 of the 2026 Regulations requires the advance and the later realisation to go through the same AD bank unless both banks are told of the change.¹ Keep the agreement showing what the advance covers.

When do I issue the GST invoice for a monthly retainer?+

The GST invoice for a monthly retainer on a contract over three months with periodic payments is issued on or before the payment due date fixed in the contract, under section 31(5) of the CGST Act.³ If no due date is fixed, the invoice is issued before or when the payment is received.³

Can a SaaS company collect subscription fees from foreign customers by card?+

A SaaS company can collect subscription fees from foreign customers by card, usually through a cross-border payment aggregator (PA-CB). RBI's Master Direction on Regulation of Payment Aggregator caps PA-CB export transactions at ₹25 lakh per transaction.⁵ Card collections bring chargeback risk, so keep usage logs and delivery evidence.

What if a retainer client cancels mid-month and wants a refund?+

If a retainer client cancels mid-month and wants a refund, follow the contract first. If you refund part of an advance or the realised amount ends up lower than the invoice, speak to your AD bank about the refund or a reduction in export value under regulation 6, and issue a GST credit note if needed.¹

Does each monthly subscription invoice have its own realisation deadline?+

Each monthly subscription invoice has its own realisation deadline, counted from that invoice's date. From 1 October 2026 the period is nine months for foreign-currency invoices and twelve months for rupee invoices.² A subscription business with many customers needs a tracker that records each invoice's deadline separately.

Does a SaaS subscription sold abroad raise different GST questions?+

A SaaS subscription sold abroad can raise different GST questions. Online services sold to foreign customers may fall under specific place-of-supply rules, and whether each customer is outside India matters for the export conditions in section 2(6) of the IGST Act.⁶ See the guides on GST on SaaS and OIDAR services.

What should a retainer contract with a foreign client say about payment?+

A retainer contract with a foreign client usually states the fee and currency, billing in advance or arrears, invoice and payment dates, unused hours, notice period and refund terms. Keep the payment due date well inside nine months of each invoice, the FEMA realisation period from 1 October 2026.²

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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