Billing a US or UK client does not automatically make the service GST-free or remove registration questions. First decide whether the supply qualifies as an “export of services” under the IGST Act: supplier in India, recipient outside India, place of supply outside India, permitted receipt condition and no disqualifying same-establishment relationship. Registration liability then depends on aggregate turnover and other rules. Registered exporters often use LUT to export without payment of IGST, subject to current conditions.
What this means for the business owner
Billing a US or UK client does not automatically make the service GST-free or remove registration questions. First decide whether the supply qualifies as an “export of services” under the IGST Act: supplier in India, recipient outside India, place of supply outside India, permitted receipt condition and no disqualifying same-establishment relationship. Registration liability then depends on aggregate turnover and other rules. Registered exporters often use LUT to export without payment of IGST, subject to current conditions.
The return/application history and underlying source records should tell one consistent story before any correction, payment or clarification is submitted.
Who should use this guide
This guide is for taxpayers facing the exact fact pattern in the title. It is especially useful when the portal and your books/documents do not agree, when another person handled the original filing, or when a current application/return deadline is approaching.
Why this problem usually happens
Freelancers equate foreign currency or a foreign billing address with export status and ignore place-of-supply/intermediary/same-establishment questions.
What should be checked immediately
Do not start with a correction entry. First collect the minimum evidence needed to prove what actually happened.
| Question | Check |
|---|---|
| Do I need registration? | Turnover + compulsory rules |
| Is it export? | IGST export-of-service conditions |
| Do I charge GST? | Depends on export/registration route |
| Need LUT? | If registered and exporting without IGST, review LUT route |
What to do now
Review contract, who actually receives the service, place of supply, payment trail, turnover, registration status and LUT strategy before issuing invoices.
Before submission, the client should receive a concise summary of the problem, the proposed tax/ITC/registration treatment, payment impact and any unresolved item. After submission, keep the ARN/order/acknowledgement and filed copy.
The 2026 legal and portal position
Export of services is zero-rated when statutory conditions are met. Inter-State service registration exemption can still be relevant below threshold, but registered exporters have return/LUT/refund obligations.
GST Portal workflows, notifications and due-date extensions can change. The official sources below were checked for this article on 19 August 2026; recheck them immediately before filing if the matter is time-sensitive.
A realistic hypothetical
A Bangalore developer contracts directly with a UK company, performs software development for that company and receives permitted foreign payment. If all export-of-service conditions are met, it can be zero-rated; that conclusion should not be copied to an intermediary/agent arrangement without review.
What happens if the problem is ignored
Wrong export classification can create output-tax or refund problems and inconsistent invoices.
What TargoLegal checks before filing or responding
TargoLegal maps service model, contract party, place of supply, turnover, registration and LUT before filing.
Before filing
Documents received, missing items, reconciliation difference, legal/portal route, payment impact and client approval.
After filing
Filed copy, ARN/acknowledgement, payment proof and a short open-items list for the next period.
What to send for a first review
Foreign client GST confusing? Send the service type, annual turnover and client country.
Related questions
What should I send first?
Send the GSTIN/ARN, the exact period or application stage, and the document that shows the problem. For this topic, the most useful starting point is: Client contract, Client country/legal entity, Service description.
Can I fix this by making an adjustment in the next return?
Not automatically. A later adjustment is appropriate only when the GST law and current portal workflow allow it and the original error has been reconciled.
Should I rely only on what the GST Portal auto-populates?
No. Portal data is essential evidence, but the taxpayer remains responsible for reconciling it with books, invoices and the applicable legal conditions.
What should I keep after the correction or filing?
Keep the filed return/form, ARN or acknowledgement, payment evidence, reconciliation working and any supplier/customer correspondence that explains the change.
When should professional review be considered?
Use professional review where the issue affects material tax or ITC, several periods, a registration notice, refund, e-invoicing, cancellation/revocation or a customer’s credit.
Official sources used
Legal and portal claims on this page use official GST Portal/GSTN, CBIC, GST Council, India Code or official IRP sources. Forum discussions were used only to understand real user questions, not as legal authority.
TargoLegal Research and Editorial Desk · Last legally reviewed: 19 August 2026. Recheck live forms, notifications, portal workflows and dates before acting.
