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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteSoftware services supplied from India qualify for GST zero-rating as exports only when all five conditions in section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act) are met. An overseas customer or payment from abroad is not enough: the supplier and recipient locations, place of supply, payment route, and relationship between the parties must all satisfy the statutory test.
The five conditions for an export of services
Apply this test to the actual supply and transaction structure, not just the service label or the address on an invoice. All five conditions are cumulative.
- The supplier is in India. Identify the supplier making the service supply for the transaction.
- The recipient is outside India. Determine who receives the service under the contract and the transaction facts. The payer, end user, contracting party, and recipient are not necessarily the same entity.
- The place of supply is outside India. For cross-border services, section 13 of the IGST Act is generally relevant. Its default rule in section 13(2) places the supply where the recipient is located, subject to statutory exceptions.
- Payment is received in convertible foreign exchange, or in INR where the Reserve Bank of India (RBI) permits it. The INR route is conditional; not every rupee payment meets the requirement.
- Supplier and recipient are not merely establishments of a distinct person. Examine the relationship under the explanation to section 8, particularly where a foreign head office or branch is involved.
If even one condition fails, the supply does not meet the statutory definition of export of services, even where the customer is overseas and funds arrive from outside India.
Classify the service and identify the recipient
“Software services” can describe development, implementation, maintenance, hosting, support, licensing, or sales and marketing assistance. The label alone does not decide the GST treatment. Establish what the Indian business has agreed to supply, to whom it supplies it, and who is responsible for the promised deliverable.
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Section 13(2) generally uses the recipient’s location as the place of supply when that location is available in the ordinary course of business. An applicable exception can change the result. In particular, section 13(8)(b) places an intermediary service at the supplier’s location. For an intermediary service supplied from India, that rule can make the place of supply India and defeat the export condition.
Own-account service or intermediary activity?
The IGST Act’s intermediary definition covers a broker, agent, or other person who arranges or facilitates a supply between two or more persons, but excludes a person who supplies the relevant goods or services on its own account. The practical issue is whether the Indian entity is delivering its own software service to the foreign customer or facilitating a supply made by someone else.
- Review the contract to see who owes the deliverable and to whom.
- Check who invoices whom and what the invoice describes.
- Compare those documents with how the parties actually perform the arrangement.
No single contract phrase settles the classification without the surrounding facts. A Telangana advance ruling in 2024 treated the applicant’s described marketing, recruitment, and referral-consultant service to foreign colleges as an independent service considered under section 13(2), while noting that the other export conditions, including payment, still had to be met. By contrast, a West Bengal ruling on arranging sales treated the applicant as an intermediary and applied section 13(8)(b), leading to a place of supply in India. These are fact-specific illustrations, not blanket classifications for software or marketing contracts; compare the facts and consider the rulings’ applicable binding effect before relying on them.
When payment in INR can satisfy the test
CBIC Circular No. 202/14/2023-GST, dated 27 October 2023, recognizes INR export proceeds received from designated Special Rupee Vostro Accounts of correspondent banks of partner trading countries, opened by authorized dealer banks, as satisfying the payment condition in section 2(6). That recognition is subject to the conditions and restrictions in Foreign Trade Policy 2023 and applicable RBI circulars, as well as any other permissions or approvals required by law.
For a particular receipt, check the account route and keep the supporting bank and invoice records. The circular addresses the payment limb only; it does not establish that a transaction meets the other export conditions.
Zero-rating and refunds are separate questions
Section 16 of the IGST Act treats exports of services as zero-rated supplies. For a registered person making a zero-rated supply, the available routes include supplying under a bond or Letter of Undertaking (LUT) without payment of IGST and seeking a refund of eligible unutilised input tax credit, or paying IGST and seeking a refund where the applicable statutory and rules-based requirements allow it.
| Route | General mechanism | Important qualification |
|---|---|---|
| Bond or LUT | Supply without payment of IGST; a refund of eligible unutilised input tax credit may be sought. | An LUT does not itself guarantee a refund. Credit eligibility and applicable documentation and filing requirements still matter. |
| Pay IGST | Pay IGST on the zero-rated supply and seek a refund where permitted. | This route is limited to prescribed classes under the current statutory framework. For IGST paid on exported services, CGST Rule 96(9) directs the refund application to FORM GST RFD-01, handled under Rule 89. |
Refund eligibility and procedure depend on the taxpayer, supply, records, and current law. Check the current Act, rules, notifications, and GST portal process before choosing a route or filing. An older CBIC sectoral FAQ broadly describes two refund options for software exports, but later amendments changed section 16 and restricted the IGST-paid route to prescribed classes; do not treat that older summary as a complete statement of current eligibility.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to check before treating an arrangement as an export
For each software export model, make a transaction file that lets you verify the statutory test and the chosen refund route. The most useful records and comparisons are:
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- the service contract, statement of work, deliverables, and evidence of performance;
- the identity and location of the recipient, and whether another party pays or uses the service;
- the parties’ establishment relationship, including any head-office or branch connection;
- the place-of-supply rule relied on, including whether an exception such as the intermediary rule applies;
- invoices and payment evidence, including documentation for any qualifying Special Rupee Vostro route; and
- registration, LUT or bond records, input-tax-credit support, and refund filings relevant to the selected route.
A conclusion for an individual supplier requires those transaction facts. Where the recipient’s identity, intermediary classification, or refund amount is material, confirm the current law and obtain case-specific tax advice.
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