The Global Freelancer’s Guide: Filing GST for International Clients

Ardifai Digital Services
Feb 16
2 min read

"Do I have to charge 18% GST to my international clients, and how do I report these earnings?"

The long answer is that exports are treated as "Zero-Rated Supplies." This means you don't have to charge your foreign clients any tax, provided you follow two specific paths. Here is how you manage your global GST filing.

1. The LUT Route (The Preferred Way)

Most global freelancers use a Letter of Undertaking (LUT). You file this simple form online at the start of every financial year (April).

The Benefit: It allows you to export services without paying any Integrated GST (IGST) upfront. You simply issue an invoice with 0% tax.
The Requirement: You must receive your payment in Convertible Foreign Exchange (USD, EUR, GBP, etc.) within the timeframe prescribed by FEMA (usually 1 year).

2. The Refund Route (Paying and Claiming)

If you don't file an LUT, you must charge IGST (usually 18%) on your international invoice, pay it to the government, and then apply for a Refund.

The Downside: This ties up your cash flow. Most small agencies and freelancers avoid this and stick to the LUT method.

3. Critical Documents for Global Filing

To keep your global filing "audit-proof," you need two specific documents for every international transaction:

FIRC (Foreign Inward Remittance Certificate): This is proof from your bank that the money came from abroad in foreign currency.
The Invoice: It must clearly state "Export of Service under LUT without payment of IGST." It should include the client's address and your LUT ARN number.

4. How to File in GSTR-1 and GSTR-3B

GSTR-1 (Table 6A): This is where you specifically report "Export Invoices." You will select the "Export under LUT" option so the system knows why you didn't collect tax.
GSTR-3B: You will report these sales under "Zero-rated supplies" in Table 3.1(b).

5. The "Bonus" for Global Agencies: Input Tax Credit (ITC)

Even if you pay 0% tax on your sales, you can still claim Input Tax Credit on your domestic

purchases (like your office rent in Mumbai, your laptop, or your AI software subscriptions).

Since you aren't collecting any tax to "offset" these credits, you can actually apply for a cash refund of the GST you paid on your business expenses. This is a massive boost for Indian agencies going global!

Summary Checklist for the Global Freelancer

File your LUT on the GST portal immediately.
Use a Global Payment Gateway (like Stripe, Wise, or PayPal) that provides FIRC/Advice.
Ensure your Invoice mentions your LUT and the foreign client's full address.
Report under Table 6A in your GSTR-1 every month/quarter.