GST on International Payments for Indian Freelancers (2026)

LUT is a declaration filed with your GST portal allowing you to export without paying IGST upfront. Without LUT, you'd pay 18% IGST on each invoice and claim a refund — which takes 60–90 days. LUT is renewed each financial year.

1. Log in to GST portal (gst.gov.in)
2. Go to Services → User Services → Furnish LUT
3. Select financial year, fill details, e-sign with DSC or Aadhaar OTP
4. Submit — receive LUT reference number
5. Quote LUT reference on all export invoices

• Declare all export invoices in GSTR-1 Table 6A (Zero-rated supply).
• Include: invoice number, date, foreign country, port code, foreign currency amount, exchange rate, INR equivalent.
• Port code for software/service exports: use 9989001 (Software) or the relevant SAC code.
• GSTR-3B: show export taxable value in row 3.1(b) (Zero rated supply).
• Monthly filers: GSTR-1 by 11th of next month. Quarterly filers: 13th of month after quarter end.

The key question for Indian freelancers is whether their foreign income qualifies as an 'export of services' — which is zero-rated for GST purposes. Here's when the exemption applies:

• Conditions for zero-rating under IGST Act: (1) The supplier is in India. (2) The recipient is outside India. (3) Payment is in foreign currency. (4) The services are not consumed in India. For most remote freelancers providing software development, design, writing, or consulting to foreign clients, all four conditions are met.
• Evidence to maintain: Foreign inward remittance certificate (FIRC) or bank remittance certificate for each payment. Client's address showing foreign location. Your GST registration.
• LUT vs Bond: If you export services regularly, file a Letter of Undertaking (LUT) each financial year instead of paying IGST and claiming refund. LUT allows you to export without paying IGST upfront.
• Where freelancers go wrong: Using PayPal's balance (PayPal India's own balance, not foreign-source transfers) without getting proper FIRC documentation. Always ensure your payment platform generates an FIRC.
• GST registration threshold: If your annual turnover from exports of services is above ₹20 lakh, GST registration is required even if your effective GST rate is 0%. Voluntarily registering below ₹20 lakh is allowed and sometimes useful for LUT and FIRC purposes.