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Indian technology exporters can claim GST refunds through one of two routes, but only after confirming that the particular supply qualifies as an export of services. A registered exporter can generally supply under a Letter of Undertaking (LUT) without paying IGST and seek a refund of eligible unutilised input tax credit (ITC), or pay IGST on the export and claim a refund of that tax where the route is available. The choice affects cash flow, evidence and the amount that may be refunded.
Zero-rated does not mean free of GST compliance: registration, correct invoicing, returns and refund documentation still matter. The steps below concern service exports such as software development, IT consulting and SaaS-related work; the contract and delivery facts, not the service label or overseas customer alone, determine eligibility.
First confirm that the service is an export
Under the IGST Act’s export-of-services definition, a service must meet all statutory conditions to qualify. In practical terms, check that:
- The supplier is located in India and the recipient is located outside India.
- The place of supply is outside India.
- Consideration is received in convertible foreign exchange, or in Indian rupees where permitted by the Reserve Bank of India.
- The supplier and recipient are not merely establishments of the same person, as described in the Act.
A foreign customer, offshore project or software invoice does not by itself establish an export. Review the contract, the actual work and delivery arrangement, and the place-of-supply rules. SaaS access, software licensing, implementation, support, data processing and consulting can raise fact-specific questions; the Act does not make every arrangement in one of those categories an export. For an unusual structure, get advice from a qualified Indian GST professional.
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The Act treats exports as zero-rated supplies and provides the two refund routes below. Zero-rated treatment does not remove the need to meet the relevant route’s requirements. See IGST Act, section 16.
Choose the refund route that fits the business
| Route | What happens | Refund sought | Main practical consideration |
|---|---|---|---|
| Export under LUT without IGST | Furnish FORM GST RFD-11 before export and make the qualifying supply without payment of IGST. | Eligible unutilised ITC, limited by the refund formula in the rules. | Avoids paying IGST on the export invoice, but input credits may remain tied up while a refund is pending. The LUT route also requires monitoring payment receipts. |
| Export on payment of IGST | Pay IGST on the qualifying export supply. | Refund of the IGST paid, subject to the applicable law, restrictions and procedure. | Requires tax payment before the claim. Check current restrictions and the business’s circumstances before selecting this route. |
The routes arise under IGST Act, section 16. The unutilised-credit refund is governed by the refund rules and is not necessarily equal to every amount shown in the electronic credit ledger. These are statutory and cash-flow differences, not a guarantee of processing time or approval.
How the LUT route works for service exports
Furnish the LUT before export
A registered person choosing to export without payment of IGST must furnish a bond or Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner before export. This requirement appears in CGST Rules, Rule 96A. CBIC’s GST FAQ also says registration is needed to claim export refunds.
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Track receipt of service-export payments
For services supplied under LUT, Rule 96A addresses cases where payment is not received in convertible foreign exchange, or in Indian rupees where RBI permits, within one year from the export invoice date. In that situation, the rule provides for payment of tax and applicable interest within 15 days after the one-year period, unless the Commissioner allows a further period. This is a compliance deadline under the rule; it should not be treated as a universal statement that any late customer payment automatically invalidates export status. Read the rule alongside the export conditions in the Act and assess the facts of the particular supply.
Use the correct invoice endorsement
The invoice endorsement must match the route used. The GST Invoice Rules prescribe these wordings:
- For payment of IGST: “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST”
- For export without IGST: “SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”
Prepare and file the refund claim
- Confirm registration and export eligibility. Check the service arrangement against each export-of-services condition before treating invoices as zero-rated.
- Select the route. Assess the credit position and cash-flow needs, and check current rules and notifications before using the IGST-paid route.
- Complete the LUT step if applicable. Furnish FORM GST RFD-11 before export and maintain a process to monitor service-payment receipts against Rule 96A.
- Issue and reconcile invoices. Apply the endorsement for the chosen route, then reconcile export invoices with outward-supply returns and accounting records.
- Assemble claim support. Align eligible ITC records, payment-receipt evidence and service completion/payment calculations with the refund period. Required documents depend on the claim category and the current portal and rule requirements.
- Apply electronically. FORM GST RFD-01 is the normal electronic refund application under the refund rules. Submit the applicable claim and respond to deficiency or verification requests through the prescribed process. See CBIC’s GST Refund Rules.
Do not import a goods-export step into a service claim. For goods, the refund rules require the export manifest or export report before the refund application, and shipping bills have their own mechanics. That is not the service-export filing workflow; see the refund rules.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How the unutilised-ITC refund is calculated
For the LUT route, the rules cap the maximum refund using this formula:
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The defined terms and relevant period matter, so the result is not automatically the exporter’s full accumulated credit. For zero-rated service turnover, the rules account for payments received during the relevant period for zero-rated services, add qualifying payments received in an earlier period for services completed during the relevant period, and subtract advances received for services not completed during that period. Use the definitions and calculation in CBIC’s GST Refund Rules rather than treating all invoices or ledger credits as refundable by default.
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Work out the filing deadline from the relevant date
The CGST Act generally provides a two-year period for a refund application, counted from the statutory “relevant date.” That date varies by refund type and, for service exports, by whether payment was received before or after completion of the service. Do not assume that every claim’s clock starts on the invoice date, export date or remittance date. Check the applicable definition in CGST Act, section 54 against the claim facts before calculating a deadline.
Official CBIC materials cited here include a 24 September 2021 consolidation of Rule 96A and Act and rules pages that may not reflect every later amendment. Before filing, verify the current statutory text, notifications and GST portal instructions for the claim period and route.
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