Working with overseas clients has become normal for Indian freelancers, agencies and consultants. A designer in Pune may work on a branding project for a Berlin startup. A developer in Hyderabad might support a US product team. A digital marketer in Mumbai may manage campaigns for Dubai based clients. These are all service exports under Indian law, and while the work feels routine, the tax and compliance rules behind it are different from domestic freelancing.

The encouraging part is that compliance for service exports is much simpler than it looks. You do not need a long list of documents or complicated filings. A few well maintained proofs, one annual form and a clean banking trail are usually enough. This blog explains the essentials in an easy, connected way.

When Your Work Qualifies as an Export

Under Indian GST rules, your service is considered an export when five conditions are met: you are located in India, the client is outside India, the place of supply is outside India, your payment comes in foreign currency or INR permitted by the RBI, and you and your client are not the same entity. This definition is important because service exports are treated as zero rated supplies, which means you do not charge GST on your invoices and you can claim back the GST you pay on business expenses.

Most freelancers do not realise that their international projects already meet the legal definition of “export of services”. Under the IGST Act, your work counts as an export when:

• You are located in India
  
• The client is located outside India
  
• The place of supply is outside India
  
• Payment is received in foreign currency or RBI permitted INR
  
• You and your client are not the same entity

Once these conditions are met, you are officially a service exporter. That matters because all such exports are treated as zero rated supplies, which means you do not charge GST and you can claim back the GST you pay on tools and expenses.

Making Sense of GST for Exporters

GST can feel intimidating until you understand one simple truth: you never charge GST on foreign clients. Exported services attract zero percent GST, and you work under something called a Letter of Undertaking, or LUT.

The LUT is filed once a year on the GST portal. It allows you to export without paying IGST upfront. In practice, your invoice remains GST free, and you can still claim input tax credit (ITC) on tools like Figma, Adobe, hosting services, office rent, cloud subscriptions and software.

This is the primary benefit of being GST registered as a freelancer. You can recover a significant portion of your business expenses through GST refunds.

FIRC and e BRC: Your Most Important Documents

Whenever you get paid from a foreign client, your bank or payment platform issues a Foreign Inward Remittance Certificate, commonly known as FIRC. This is followed by an e BRC, which is the final confirmation of realisation. These two documents are extremely important because they prove to GST, income tax and banks that you have legitimately received foreign income under FEMA guidelines.

Export payment platforms often generate these automatically, while banks may take longer. Either way, keeping FIRCs and e BRCs safely stored is essential because they are needed for refund claims, tax assessments and DGFT compliance.

The backbone of export compliance lies in two documents issued when foreign money arrives:

• FIRC (Foreign Inward Remittance Certificate)
  
• e BRC (Electronic Bank Realisation Certificate)

A FIRC confirms that you have legitimately received foreign currency under FEMA rules. The e BRC is the bank’s final confirmation that the payment was realised. These are required for:

• GST refunds
  
• Income tax assessments
  
• DGFT related procedures
  
• Audit trails
  
• Proving that income was earned abroad
  

Modern platforms generate these automatically, while banks may take longer. Either way, losing FIRCs or e BRCs can create unnecessary trouble during refunds or tax filings, so store them safely.

Income Tax, TDS and Foreign Payments Explained

Freelancers often get confused about TDS when working with foreign clients. The rule is very straightforward: foreign clients do not deduct TDS on your income. You pay tax in India on your profits as business income after deducting legitimate expenses.

TDS rules like Section 194Q apply only to goods purchased within India. Section 195 applies only when you send money abroad. For example, if you hire a foreign contractor or buy certain foreign services, you may need to check DTAA rules and sometimes file Forms 15CA and 15CB. These forms are not required for incoming export payments.

FEMA Rules and Timely Receipt of Payments

Under FEMA rules, export proceeds must generally be received within nine months. Banks verify this using your FIRC and e BRC records. As long as your invoicing is clear and payments are on time, there is rarely an issue. If delays happen, banks may ask for clarifications, but most freelancers pass this check easily with proper documentation.

Common Mistakes and Simple Fixes

Most compliance issues arise from avoidable mistakes. Many freelancers forget to renew their LUT and end up paying IGST unnecessarily. Others lose their FIRC records and face delays in refunds. Some use personal bank accounts for export income, which complicates both tax filing and FEMA checks. Even using the wrong SAC code in invoices can lead to errors during audits.

These problems disappear when your workflow is organised. Create a separate folder for export invoices, FIRCs and e BRCs. Keep a clean bank trail and ensure that your invoices use the correct SAC code and mention zero rated supply. File your LUT at the start of every financial year, and request your payment platform for FIRCs if they are not auto-generated.

So a few pointers help keep things clear:

• Forgetting to file the LUT on time leads to unnecessary IGST payments
  
• Losing FIRCs creates delays in GST refunds
  
• Using personal bank accounts for export income complicates FEMA checks
  
• Incorrect SAC codes on invoices lead to GST mismatches
  
• Not keeping payment proofs organised results in compliance gaps
  

When documentation is clean, compliance becomes routine. A simple folder for invoices, FIRCs, e BRCs and tool receipts can prevent most issues.

Building a Smooth Compliance Workflow

Once your structure is in place, compliance becomes predictable. Your annual LUT, export invoices, FIRCs, e BRCs and GST returns form the core of your system. Contract copies or email confirmations help during audits. Your income tax filing becomes a summary of foreign receipts minus business expenses.

With this framework, every international project becomes easier to manage, and your CA’s job becomes simpler too.

Conclusion

Exporting services from India is much simpler than it appears. The system is designed to support exporters through zero rated GST, ITC refunds and flexible FEMA provisions. When you understand how GST, FIRCs, BRCs and income tax rules connect, compliance stops feeling like a burden. The only real requirement is staying organised and choosing payment channels that give you clean, timely documentation.

Getting Paid Smoothly With BRISKPE

For freelancers and agencies receiving international payments, BriskPe helps simplify the last mile of compliance. Its slab based A2A fee structure is predictable, the FX conversion uses real market rates without hidden markups, and e FIRA is generated automatically. These documents directly support your GST refunds and income tax filing, making it easier to stay compliant while focusing on your work. Explore BRISKPE.com today!