GST for Freelancers, IT Consultants & Software Exporters: Letter of Undertaking (LUT)

Is GST Mandatory for Freelancers and Exporters?

If you are a freelance software engineer, UI/UX designer, consultant, or content creator receiving foreign currency payments from overseas clients (Upwork, Fiverr, Stripe, direct wire), your services qualify as an Export of Services under Section 2(6) of the IGST Act.

Export of Services Conditions

1. The supplier of service is located in India.
2. The recipient of service is located outside India.
3. The place of supply of service is outside India.
4. Payment is received in convertible foreign exchange (or INR where permitted by RBI).
5. The supplier and recipient are not merely establishments of the same person.

Filing Letter of Undertaking (LUT / Form GST RFD-11)

Export of services is treated as a Zero-Rated Supply. By filing a Letter of Undertaking (LUT) on the GST portal at the beginning of each financial year, you can bill overseas clients at 0% GST without paying IGST upfront.

Important Banking Proofs (FIRC / FIRS)

To substantiate that payments were received in foreign currency, freelancers must collect Foreign Inward Remittance Certificates (FIRC) or Foreign Inward Remittance Statements (FIRS) from their processing bank.