Guide
LUT and zero-rated export invoices
How an Indian consultancy invoices an overseas client: export of services, zero rating, and supplying under a Letter of Undertaking.
A service supplied by an Indian supplier to a recipient outside India can be an export of services under section 2(6) of the IGST Act. Its conditions include that the place of supply is outside India and that payment is received in convertible foreign exchange, or in rupees where the RBI permits.
An export of services is a zero-rated supply under section 16 of the IGST Act. A registered supplier can make it without paying IGST by furnishing a Letter of Undertaking (LUT, filed in Form GST RFD-11), or pay IGST and claim it back as a refund.
An invoice supplied under an LUT says so, typically with a line such as "Supply meant for export under LUT without payment of IGST".
In ReliTime
ReliTime works the treatment out from both parties’ registered locations, so an invoice to a client outside India is a zero-rated export, and the organisation records its LUT.
This is a guide, not tax advice. Check how it applies to your own supplies with your adviser.
Related
Questions people ask
Is every invoice to an overseas client an export?
Not always. Every condition in section 2(6) of the IGST Act has to be met, including the place of supply being outside India. Some services, such as those tied to immovable property in India, have their own place of supply rules.
Does an LUT have to be renewed?
An LUT is furnished for a financial year, so it is filed again for each new year.
See it on your own kind of work
We set ReliTime up with a walkthrough rather than a sign-up form. We will take you through a working organisation, from a week of timesheets through approvals and work in progress to a GST invoice, answer your questions as we go, and set up yours.
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