A service supplied from India qualifies as an export under GST only when all five conditions in section 2(6) of the Integrated Goods and Services Tax Act, 2017 are satisfied. The customer being overseas, the invoice being in a foreign currency, or the work being delivered online is not enough by itself.
Use the sequence below: identify the legal supplier and actual recipient, determine the applicable place-of-supply rule, test whether the supplier is an intermediary, check whether the parties are separate legal persons, verify receipt of payment in the form required by the statutory wording, and then select the export-compliance route. This article reflects the official CBIC material and statutory wording available on 13 October 2026; check later amendments, rules and notifications before taking a filing position.
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The five conditions you must pass
Section 2(6) defines “export of services” as a supply in which every listed condition is met. The test is cumulative: failure of one condition means the supply does not meet the statutory definition, even if the other four are satisfied.
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|---|---|
| Supplier location | The supplier of the service is located in India. |
| Recipient location | The recipient of the service is located outside India. |
| Place of supply | The legally determined place of supply is outside India. |
| Payment | Payment has been received by the supplier in convertible foreign exchange, subject to the statutory wording and any later applicable amendment or rule. |
| Distinct-person restriction | The supplier and recipient are not merely establishments of a distinct person under Explanation 1 to section 8. |
Keep the five conditions together in your file. A conclusion based only on the customer’s country or the currency shown on an invoice skips the most frequently disputed parts of the test: place of supply, intermediary status and the legal relationship between the parties.
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Step 1: Identify the supplier and the actual recipient
Start with the contracting legal persons
Write down the legal entity that has undertaken to provide the service, the entity that is liable to pay, and the entity that actually receives the service. Use the contract, statement of work, purchase order, invoice instructions and operational correspondence to reconcile those three roles.
The recipient is not automatically an end user, an Indian representative, or the people who see an advertisement. In the own-account advertising situation described by CBIC, an Indian advertising company contracts with and is paid directly by a foreign client. CBIC treats that foreign client as the recipient even where the campaign reaches an Indian audience or involves an Indian representative.
Document where the recipient receives the service
CBIC’s FAQ describes the recipient’s place of business where the service is received as relevant to the location test. If the recipient has no place of business, its usual residence is relevant. Obtain evidence supporting the establishment that receives the service, such as the contracting entity’s address, the service specification, instructions from the receiving office and payment records.
Do not substitute the location of a group headquarters, a local liaison, a user, or an advertising audience for the establishment that receives the contracted service. If more than one group entity appears in the documents, resolve which one is the customer before moving to place-of-supply analysis.
Step 2: Determine the place of supply under section 13
Apply section 13 when a supplier or recipient is outside India
Section 13 applies to a cross-border supply where the supplier or the recipient is outside India. Section 13(2) sets the general rule: the place of supply is the location of the recipient. That rule is only a starting point because section 13 contains specific exceptions.
Check the service-specific exceptions before using the general rule
Review the subsection that matches the service actually performed. The Act contains special rules for categories including:
- services involving goods that must be made physically available to the supplier;
- services requiring the physical presence of an individual;
- services connected with immovable property;
- admission to, or organisation of, events;
- intermediary services;
- certain banking and financial services; and
- certain hiring of means of transport.
The legal label in a contract does not decide the result. Ask what the supplier is actually supplying, on whose account, and to whom. A remote or digital delivery method does not remove the need to classify the service under the correct section 13 rule.
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Record the reasoning, not just the answer
For each transaction, record the service description, the performance activities, the recipient establishment, the section 13 provision applied, and why no more specific exception displaces the general rule. This short memorandum helps demonstrate how the place of supply was reached if the invoice, payment or refund is later reviewed.
Step 3: Test whether the supplier is an intermediary
Use the statutory definition
The Act defines an intermediary as “a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons.” The definition excludes a person who supplies those goods, services or securities on its own account.
Therefore, identify whether your business is the principal supplier of the service promised to the customer or is arranging another person’s supply. A company may use labels such as consultant, coordinator, platform, support provider or representative; the label does not answer the statutory question.
Why intermediary status can defeat export treatment
Section 13(8)(b) places the place of supply of intermediary services at the supplier’s location. For an India-based supplier, that generally places the service in India rather than outside India. The third condition in section 2(6) then fails, so the supply cannot be treated as an export under that definition, even when the customer is outside India.
CBIC’s FAQ uses brokerage supplied by an Indian stock broker to non-resident clients to illustrate this consequence: the overseas client does not, by itself, move the place of supply outside India.
Distinguish own-account ITeS from facilitation
CBIC Circular 107/26/2019-GST says an information-technology-enabled services provider that is not an intermediary can claim export treatment when the section 2(6) conditions are met. If the provider also arranges or facilitates support services, the classification becomes fact-specific. CBIC directs attention to the principal or main supply and the circumstances in which the services are delivered.
For an ITeS contract, list the provider’s own deliverables separately from any activity that introduces a customer to another supplier, negotiates that supplier’s service, books it, or passes the order through. Explain which activity is the principal supply and why the provider is, or is not, supplying the relevant service on its own account.
Step 4: Check the relationship between group companies and establishments
Separate incorporated companies are not automatically the same person
CBIC Circular 161/17/2021-GST clarifies that an Indian-incorporated company and a company incorporated abroad are separate legal persons. A service supplied by the Indian subsidiary to its foreign-incorporated parent is not barred from meeting the distinct-establishments condition merely because the companies are related. The other four conditions still have to be proved.
Branches and representative offices require a different analysis
A branch, representative office or other establishment of the same company can be an establishment of one legal person rather than a separately incorporated recipient. The fifth condition is aimed at supplies between establishments of a distinct person, so do not treat a same-company structure as equivalent to a subsidiary-parent structure.
Obtain incorporation documents, registrations, the contract parties and the organisational structure before deciding. A shareholding chart alone cannot resolve whether the parties are separate legal persons or establishments of one person.
Step 5: Verify payment in the form required by the statutory wording
The statutory wording requires payment to be received by the supplier in convertible foreign exchange. Reconcile the receipt to the contract, invoice, customer, amount, bank record and service period. Retain the records that show when and from whom the consideration was received.
CBIC’s FAQ gives an example in which payment from an NRE account in Indian rupees did not satisfy the stated convertible-foreign-exchange condition. Consequently, an overseas customer, an NRE account, or a foreign-currency invoice should not be treated as conclusive without checking the actual receipt and the current applicable law.
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Step 6: Choose the GST compliance route only after classification
Use the prescribed export invoice endorsement
For a supply treated as an export, CBIC’s invoice rules prescribe an export endorsement. Where the supply is made without payment of integrated tax under a bond or Letter of Undertaking, the endorsement includes:
“SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”
Use the wording required for the route selected and ensure the invoice identifies the parties, service and transaction consistently with the contract and payment records.
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LUT or bond route
CBIC states that an exporter making export of services without payment of integrated tax must comply with section 16(3) of the IGST Act and Rule 96A by furnishing a Letter of Undertaking or bond. This is a compliance step after the supply has been classified; furnishing an LUT does not turn a non-export into an export.
Refund of input tax credit
CBIC’s refund rules provide a calculation for refund of input tax credit for qualifying zero-rated supplies made without payment under a bond or LUT. Whether a particular input, credit and claim is eligible depends on the applicable provisions and procedural requirements. Keep invoices, credit records, export invoices, payment evidence and the relevant return data together so the refund claim can be reconciled to the qualifying supplies.
Do not combine three separate questions: whether the supply is an export, whether it is zero-rated and whether a particular refund claim is procedurally and substantively eligible. Resolve them in that order under the rules in force for the relevant period.
A practical decision procedure
Use this sequence for each service line or contract. If an answer is uncertain, stop and resolve the factual issue instead of assuming that the customer is overseas.
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- Describe the service. State the activities, deliverables, personnel involved and whether another supplier’s goods or services are being arranged.
- Identify the supplier. Name the legal person in India that contracted to provide the service and issued the invoice.
- Identify the recipient. Name the legal person liable to pay and establish which place of business or usual residence receives the service.
- Map the performance. Note where people, goods, property, events, systems and establishments involved in the service are located.
- Select the section 13 rule. Begin with section 13(2), then test each relevant exception before concluding that the place of supply is the recipient’s location.
- Test intermediary status. Decide whether the supplier is providing the relevant service on its own account or arranging or facilitating a supply between other persons.
- Check the legal-person relationship. Confirm whether the recipient is a separately incorporated company or an establishment of the same legal person.
- Verify payment. Match the actual receipt to the statutory payment requirement, including the convertible-foreign-exchange wording applicable to the transaction.
- Conclude on section 2(6). Mark each of the five conditions as supported by evidence. One failed condition means the supply does not qualify as an export under the definition.
- Apply the compliance route. Only after classification, issue the required invoice endorsement and assess LUT or bond, tax payment and refund procedures.
How common service patterns differ
| Pattern | Key question | Effect described in CBIC guidance |
|---|---|---|
| Own-account ITeS | Is the provider delivering its own backend or technology service rather than facilitating another provider? | An ITeS provider that is not an intermediary can use export treatment if all section 2(6) conditions are met. |
| ITeS plus support facilitation | Which activity is the principal or main supply, and does the provider arrange another person’s service? | Intermediary status depends on the facts and circumstances. |
| Indian subsidiary serving foreign parent | Are the Indian and foreign companies separately incorporated? | They are separate legal persons for the distinct-establishments condition; the other four conditions remain applicable. |
| Branch or representative office of the same company | Are the parties establishments of one legal person? | The distinct-person restriction requires separate analysis and is not resolved by treating the office as a subsidiary. |
| Advertising supplied on own account | Does the Indian advertising company contract with and receive payment directly from the foreign client? | CBIC Circular 230/24/2024-GST describes the foreign client as recipient and indicates section 13(2) may apply, subject to section 2(6). |
| Advertising media facilitation | Does the agency merely arrange media space while the media owner contracts with and invoices the foreign client? | The agency’s activity is intermediary service, with place of supply at the agency’s location. |
These are fact patterns under the circumstances described in the CBIC material, not automatic outcomes for every contract using the same industry label.
Evidence file to retain
A defensible conclusion should allow another reviewer to follow the transaction from contract to receipt. Retain, as applicable:
- the signed contract, statement of work and purchase order;
- documents identifying the supplier and recipient legal persons;
- evidence of the recipient establishment that receives the service;
- a service description showing own-account performance or any facilitation role;
- the section 13 place-of-supply analysis and the exception checks performed;
- incorporation and organisational documents for related-company or branch arrangements;
- tax invoices with the applicable export endorsement;
- bank or remittance records showing receipt and currency;
- LUT or bond documentation where the without-payment route is used; and
- input-tax-credit and return records supporting any refund claim.
Keep the evidence aligned by customer, invoice and service period. A mismatch between the contracting party, invoice recipient and payment source can create a separate factual issue even when the service itself appears exportable.
Frequent mistakes and how to correct them
“The customer is abroad, so it is automatically an export.”
Correct the analysis by completing all five section 2(6) conditions, especially place of supply and intermediary status.
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“The invoice is in US dollars, so payment is compliant.”
Correct the analysis by checking the actual receipt. The statutory wording concerns payment received in convertible foreign exchange, not merely the currency printed on an invoice.
“Our contract calls us an agent, but we do the work ourselves.”
Correct the analysis by mapping the actual supply. A person supplying the relevant service on its own account is excluded from the intermediary definition, while a person arranging or facilitating another supply may fall within it.
“Our foreign parent and we are one group, so exports are prohibited.”
Correct the analysis by checking incorporation. An Indian subsidiary and a foreign-incorporated parent are separate legal persons for the fifth condition; a branch or representative office of the same company raises a different issue.
“An LUT proves that the service is an export.”
Correct the sequence: classify the supply first, then satisfy the LUT or bond and invoice requirements for the chosen zero-rated route.
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Escalate the analysis when the service combines own-account work with arranging another supplier’s service, when several establishments receive or use the output, when payment comes through an NRE or other rupee account, when a branch or representative office is involved, or when the service could fit a specific section 13 exception. Those facts can change the statutory result even if the commercial customer and contract price remain unchanged.
For a current filing decision, check the text of section 2(6), section 13 and section 16 of the IGST Act, the applicable rules and notifications, and the latest CBIC clarifications for the transaction date. The official FAQ contains legacy material, so use it as guidance together with the law and current procedural requirements.
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