Freelancing for Foreign Clients: Do You Need GST, and What Is an LUT?

If you are a freelancer or a small agency invoicing clients outside India, GST treats that as an export of services. Zero-rated, not exempt — and the difference between those two words decides how you operate.

First: Do You Even Need to Register?

A widely repeated belief is that exporting means compulsory registration. For services, that is not so.

The compulsory-registration rule for inter-state supply applies to goods. A service exporter still gets the benefit of the ₹20 lakh threshold (₹10 lakh in special category states). A developer billing ₹15 lakh a year entirely to US clients does not need GST registration on those grounds alone.

But remember that aggregate turnover is counted PAN-wide and includes both domestic and export income. ₹12 lakh from Indian clients plus ₹9 lakh from abroad crosses the line.

What Makes It an Export

All of these have to hold:

• The supplier is in India and the recipient is outside India
• The place of supply is outside India
• Payment is received in convertible foreign exchange
• The two parties are not merely separate establishments of the same person

That last one matters if you are invoicing your own overseas entity. It may not qualify as an export.

Zero-Rated Means You Have a Choice

Once registered, exports can be made by one of two routes:

With an LUT. File a Letter of Undertaking and export without paying IGST at all.

Without an LUT. Pay IGST on the export and then claim it back as a refund.

For almost every freelancer the LUT is the better route. The alternative means handing the government money and waiting to get it back — a refund cycle that is entirely avoidable.

The LUT Detail People Forget

An LUT is valid for one financial year and has to be refiled at the start of the next one.

This is the single most common failure. A freelancer files an LUT in year one, forgets about it, and in April of year two is exporting without a valid LUT in force. Strictly, IGST is then payable on those invoices and has to be chased back as a refund.

Put a reminder in April. It takes minutes to refile.

Keep Your Payment Evidence

Because payment in convertible foreign exchange is a condition, the paperwork proving it matters. Keep your Foreign Inward Remittance Certificate or advice from your bank, and make sure your invoices, your bank credits, and your returns tell the same story. Payment platforms that convert before crediting you can complicate this, so check what documentation yours provides.

The Short Version

Under the threshold and billing only abroad? You may not need to register at all. Over it, register and file an LUT — then refile it every April.

We handle both. See LUT filing for exporters, or GST registration if you are starting from scratch.