For IT and software companies — increasingly around Gandhinagar’s GIFT City and Ahmedabad — GST turns on one distinction: domestic vs export. Domestic software services are 18%; exported services, with an LUT, are zero-rated. Getting that right is often the difference between paying 18% and paying nothing.
Domestic vs export
Software development, IT consulting, SaaS and support supplied to Indian clients are taxable at 18%. The same services supplied to clients abroad, with payment in foreign currency, generally qualify as export of services — zero-rated. With an LUT in place you invoice overseas clients without GST and claim refunds of input credit; without it, you’d pay 18% IGST and reclaim it. For an export-heavy IT firm, the LUT is essential.
SEZ, SaaS and OIDAR
Supplies to SEZ units are zero-rated like exports. SaaS and digital products sold to consumers abroad can fall under OIDAR rules, with their own place-of-supply and reporting treatment. Product vs service classification, and B2B vs B2C cross-border supply, each change the GST position — worth setting up correctly from the start rather than unwinding later.
What we handle for IT companies
- Registration and LUT filing so export revenue is zero-rated
- Correct SAC codes and export-compliant invoicing
- Input-credit refunds on the credit accumulated against zero-rated exports
- Monthly GSTR-1 + GSTR-3B, separating domestic and export supply