If you’re an Indian freelancer or business billing a client abroad — a US startup, a UK agency, a Dubai client — your invoice looks different from a domestic one. Get it wrong and you can run into problems at GST filing time, or with the client’s own finance team.
Here’s how export invoicing actually works, and what needs to be on the document.
Exports Are “Zero-Rated,” Not Tax-Free by Accident
Under GST, supplying goods or services to a client outside India counts as an export of services, which is zero-rated. You don’t charge CGST, SGST, or IGST on the invoice — but that’s not the same as being outside GST’s scope entirely. You still need:
- A valid GSTIN, even as a solo freelancer, once you cross the registration threshold or want to claim input tax credit
- To meet the conditions for “export of services” — the recipient must be located outside India, payment must be received in convertible foreign exchange (or INR where RBI permits), and the place of supply must be outside India
- An LUT (Letter of Undertaking) filed with GST authorities to export without paying IGST upfront — or pay IGST and claim a refund later, though almost everyone with a valid LUT takes the first route
What Actually Goes on the Invoice
An export invoice should clearly show:
- The declaration: “SUPPLY MEANT FOR EXPORT UNDER LUT WITHOUT PAYMENT OF IGST” (or the applicable variant)
- The amount in the client’s currency (USD, EUR, etc.) — not INR
- No CGST/SGST/IGST line items, since the rate is nil
- Your GSTIN and the client’s details, even without an Indian GST number for the client
The Exchange Rate Question
This is where manual invoicing quietly goes wrong. You’re dealing with two different numbers, and they’re rarely the same:
| Rate | Used for |
|---|---|
| Rate at invoice time | Records the INR-equivalent of the invoice for your books and GST returns |
| Rate at payment time | What your bank actually credits, after their own conversion spread |
The rate should be captured and fixed at the time the invoice is raised — not adjusted afterward every time the rupee moves. That fixed rate feeds your reported turnover; the amount you actually receive later is a separate reconciliation, not a correction to the original invoice.
A Quick Reference
On the invoice: currency = client’s currency, tax = nil, LUT declaration included, exchange rate locked at invoice date.
In your books: INR-equivalent from the locked rate, separate from whatever the bank actually pays out.
Invoicing System switches automatically to No Tax when you select a foreign client or currency, pulls a live exchange rate you can review or override, and locks it in at the invoice date — so your INR-equivalent figures stay consistent no matter what the rupee does afterward. Try it free →