What is export of services?
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Short answer
Section 2(6) of the Integrated Goods and Services Tax (IGST) Act, 2017 sets five conditions for export of services.1 The supplier is in India and the recipient and place of supply are outside India.1 Payment must arrive in convertible foreign exchange or in rupees where RBI permits.1 Export of services is a zero-rated supply under section 16.1
| Full form | Governed by | Who needs it | Where it is used | Related terms |
|---|---|---|---|---|
| Export of services (no abbreviation) | IGST Act, 2017, sections 2(6) and 16; FEMA (Export and Import of Goods and Services) Regulations, 202612 | Any supplier in India billing a recipient outside India1 | GST invoices and returns, and EDF filing and realisation with the AD bank12 | Zero-rated supply, place of supply, LUT, EDF, export realisation |
"Export of services" has a precise legal meaning in India. For GST it decides whether an invoice to a foreign client carries tax. For foreign exchange law it decides which reporting and realisation rules apply.12
What does export of services mean in simple words?
Export of services means selling a service from India to a client abroad in a way that meets all five conditions in section 2(6) of the IGST Act:1
- Supplier: The supplier of service is located in India.1
- Recipient: The recipient of service is located outside India.1
- Place of supply: The place of supply of service is outside India.1
- Payment: Payment is received by the supplier in convertible foreign exchange, or in Indian rupees wherever permitted by the Reserve Bank of India (RBI).1
- Separate persons: The supplier and recipient are not merely establishments of a distinct person under Explanation 1 to section 8.1
All five must hold for the same invoice.
Why does export of services matter for Indian exporters and freelancers?
Export of services matters because it decides the GST on the invoice and the foreign exchange duties that follow it.12
- GST: Section 16 makes export of services zero-rated, so a registered supplier can export under a Letter of Undertaking (LUT) without paying integrated tax, or pay it and claim a refund.1
- Bank compliance: Under the FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations), in force from 1 October 2026, every exporter of services files an Export Declaration Form (EDF) stating the full export value.2
Income tax on the same receipts is a separate question; confirm it with a chartered accountant.
How does export of services work under FEMA?
Under FEMA, export of services works through a declaration and a realisation deadline set by the 2026 Regulations.2
- Declaration: The EDF is due within 30 days from the end of the month in which the invoice is raised, or, for services other than software, on or before the date payment is received.2
- Realisation: The full export value must be realised and repatriated within nine months from the invoice date, or twelve months where the export is invoiced or settled in rupees.2
Your authorised dealer bank tracks both.
How do you check whether a supply is an export of services?
You check whether a supply is an export of services by testing each of the five section 2(6) conditions against the facts of the invoice.1
- Copywriting: For example, a copywriter in Pune paid in dollars by a New York agency can meet the conditions.
- Accounting: For example, an accountant in Kochi keeping books for a Dubai company can meet them.
- Tutoring: For example, a tutor in Jaipur teaching students in Canada can meet them.
The place of supply condition depends on rules with special cases, such as on-site work or work on goods sent by the client. See place of supply for export of services, intermediary services under GST, or test a transaction with the export of services checker.
What is the difference between export of services under GST and under FEMA?
Under GST, export of services decides whether tax is charged; under FEMA, it decides reporting and realisation.12
| Question | GST (IGST Act) | FEMA (2026 Regulations) | Best for |
|---|---|---|---|
| What it decides | Whether GST is charged | Reporting and realisation | Knowing which authority checks what |
| Key test | Five conditions in section 2(6) | Declaration and realisation within the period | Testing an invoice before it is issued |
| Main document | Invoice with LUT endorsement | EDF | Keeping the right records for each regime |
The table summarises sections 2(6) and 16 of the IGST Act and regulations 3 and 5 of the 2026 Regulations.12 A transaction is usually checked under both.
What do people get wrong about export of services?
People most often get wrong the conditions that are easy to miss.1
- Related parties: Billing an establishment of the same person fails the fifth condition.1
- Place of supply: A recipient outside India and a place of supply outside India are separate conditions in section 2(6).1 The place of supply has special cases, such as on-site work.
- Partial compliance: Meeting four of the five conditions is not enough.1
Which terms are related to export of services?
The terms related to export of services cover the GST tests and the FEMA documents.
- Zero-rated supply: The GST treatment of exports; see what is a zero-rated supply.
- Place of supply: The third condition; see what is place of supply.
- LUT: The undertaking for exports without IGST; see what is an LUT.
- EDF: The FEMA declaration; see what is the EDF form.
- Export realisation: The FEMA deadline; see what is export realisation.
The detailed comparison of both definitions is in export of services under GST and FEMA, and the tax mechanics are in GST on export of services.
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 freelancing for a foreign client an export of services?+
Freelancing for a foreign client is usually an export of services if all five conditions in section 2(6) of the IGST Act are met, including payment in convertible foreign exchange and a place of supply outside India.1 If any one condition fails, the work may be treated as a domestic supply, so check each condition per client.
Is payment through PayPal or a payment platform still an export of services?+
The IGST Act asks whether the supplier received payment in convertible foreign exchange or in rupees where RBI permits; section 2(6) does not name a payment channel.1 A receipt through a platform can therefore meet the payment condition. Keep the remittance advice showing the foreign currency receipt for each export of services invoice.
What happens if one condition of export of services fails?+
If one of the five conditions in section 2(6) of the IGST Act fails, the supply is not an export of services and may be taxable as a domestic supply.1 The zero-rating under section 16 then does not apply. Check the specific facts with a chartered accountant before issuing the invoice without GST.
Is GST charged on export of services?+
Export of services is a zero-rated supply under section 16 of the IGST Act.1 A registered supplier can export under a Letter of Undertaking without paying integrated tax, or pay integrated tax and claim a refund.1 Either way, the exporter should not end up bearing GST on the export of services.
When is the EDF due for an export of services?+
Under the FEMA (Export and Import of Goods and Services) Regulations, 2026, the Export Declaration Form for an export of services is due within 30 days from the end of the month of invoicing.2 For services other than software, the exporter may instead file it on or before the date payment is received.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.
Keep reading
What counts as export of services under GST and under FEMA?
GST and FEMA define export of services differently. Compare IGST section 2(6) with FEMA section 2(l), and see when a service counts under one law but not the other.
GSTHow does GST apply to export of services from India?
How GST works when you bill a foreign client from India: the five export conditions, LUT vs IGST refund, records to keep, payment deadlines and mistakes.
GSTHow is the place of supply decided when you export services from India?
How IGST section 13 decides the place of supply when your client is abroad: the recipient-location rule, the exceptions that keep it in India, and 2026 changes.
GlossaryWhat is a zero-rated supply?
A zero-rated supply under section 16 of the IGST Act is an export, or a supply to an SEZ, on which input tax credit stays available. What it means for exporters.