N D Savla & Associates – CA Firm in Mumbai

Call For Business Enquiries :

+91 9819000511 / +91 9167058000 / +91 9819000445

Contact us
GST Refund on Export of Services – N D Savla & Associates
GST Refund

GST Refund on Export of Services
Section 2(6) Qualification, LUT Route & Form RFD-01 Unutilised ITC Refund

Specialised zero-rated service export refunds for IT, software, consulting, and SaaS exporters — Section 2(6) five-condition test, place-of-supply analysis under Section 13, Letter of Undertaking filing, FIRC/BRC foreign-exchange evidence, intermediary screening, and Form RFD-01 processing through to disbursal.

Part of our GST Refund practice: GST Refund Services GST Compliance GSTR-3B Filing FEMA Advisory

Overview

Why Service Export Refunds Matter

Export of services is treated as a zero-rated supply under Section 16 of the IGST Act 2017, so a service exporter charges no GST on the export yet still pays GST on the inputs used to deliver it. The accumulated input tax credit is therefore recoverable as a refund — without which the credit becomes a permanent cost that erodes the exporter's margin and the competitiveness of Indian service exports.

Not every cross-border service automatically qualifies as an export. The five conditions of Section 2(6) of the IGST Act must all hold together — supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange, and supplier and recipient not merely establishments of the same person. Failure of even one condition removes export status and the refund entitlement entirely.

N D Savla & Associates handles every angle of service export refund work — export qualification under Section 2(6), place-of-supply analysis under Section 13, Letter of Undertaking filing, foreign-exchange reconciliation through FIRC and BRC evidence, the intermediary classification that most often sinks a claim, Statement 2 and Statement 3 preparation, two-year relevant-date management, and full Form RFD-01 filing through to bank disbursal. Our practice connects with the wider GST refund framework and coordinates with GST compliance, GSTR-3B filing, and GSTR-2B reconciliation and ITC review.

Because services have no shipping bill, the foreign-exchange certificate carries the evidential weight that a shipping bill carries for goods — making forex documentation and the intermediary question the two issues that decide most service export refunds. Every engagement reads both together, so the refund claim rests on a defensible, well-documented position.

Common Service Exporter Profiles

When Should a Service Exporter Review Its Refund Position?

Service export refunds are relevant across every cross-border service profile, but the place-of-supply position and payment route change the claim materially in these common situations.

IT & Software Exporter Under the LUT Route

Large accumulated input tax credit on zero-rated exports — five-condition test, place-of-supply documentation, and Form RFD-01 unutilised ITC refund filing.

Consultant or SaaS Provider Billing Overseas

Recipient-location place of supply with usage documentation — FIRC reconciliation and unutilised credit refund for professional and digital service exporters.

Design or Engineering Service Exporter

Performance-location exception check and contract review — confirming the service is not physically performed in India before computing the refund.

Indian Subsidiary Serving Its Foreign Parent

Distinct-person test under the fifth condition — head-office-to-own-branch supplies do not qualify, so the relationship must be principal-to-principal.

Business Unsure It Is an Intermediary

Principal-versus-intermediary classification — intermediary services have their place of supply in India and lose the zero-rated benefit entirely, so this is settled before filing.

Exporter Paid in INR via Special Rupee Vostro

Foreign-exchange-condition treatment — INR proceeds through a Special Rupee Vostro Account of a partner trading country can satisfy the convertible-foreign-exchange test.

Our Services

Our Service Export Refund Services

Our practice follows a structured eight-step workflow — export qualification, LUT confirmation, foreign-exchange reconciliation, ITC compilation, return reconciliation, statement preparation, RFD-01 filing, and disbursal. The six service blocks below cover the end-to-end recovery.

01

Section 2(6) Five-Condition Export Qualification

We test the service against all five cumulative conditions of Section 2(6) of the IGST Act — supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange (or INR where the RBI permits), and supplier and recipient not merely establishments of the same distinct person. Because failure of even one condition removes export status, we begin every engagement here and document a defensible qualification position before any refund work proceeds.
IGST Act 2017 – Section 2(6)
02

Place-of-Supply Analysis Under Section 13

Place of supply is the most technically demanding condition. Under Section 13, the default rule is the recipient's location — which supports the export — but exceptions shift it back to India for services connected to immovable property here, services physically performed in India, event admission, and intermediary services. For digital, consulting, and SaaS services we align the contracts, invoices, and usage records so they consistently show the service is consumed by the overseas recipient.
IGST Act 2017 – Section 13
03

LUT Filing & the IGST-Payment Alternative

Most service exporters prefer the Letter of Undertaking route — filing an LUT, exporting without paying IGST, and claiming a refund of accumulated unutilised credit through Form RFD-01. We file and renew the LUT for each financial year (a lapsed LUT forces the IGST-payment route, which blocks working capital) and use the IGST route only when the LUT is unavailable. Because services have no shipping bill, the refund always flows through RFD-01 rather than the customs system.
Letter of Undertaking · RFD-01
04

Foreign-Exchange (FIRC / BRC) Reconciliation

Because services have no customs record, the Foreign Inward Remittance Certificate or Bank Realisation Certificate is the primary proof that an export occurred and was paid for — the evidence that directly satisfies the fourth condition. We reconcile each export invoice against its FIRC/BRC, track realisation within the FEMA timeline, and confirm Special Rupee Vostro treatment where the exporter is paid in Indian rupees. Our FEMA advisory service supports the foreign-exchange compliance.
FEMA Realisation Timeline
05

Intermediary Screening & Claim Protection

The intermediary classification is the most common reason a service export refund is denied. An intermediary arranges or facilitates a supply between two other persons without supplying on its own account — and its place of supply is in India, so the third condition fails even where the recipient is overseas and pays in foreign exchange. We examine whether the service is a genuine principal-to-principal export or an intermediary arrangement, reviewing the contracts to establish supply on own account, before any refund is filed.
Place of Supply – Intermediary
06

Statement Preparation, RFD-01 Filing & Disbursal

We prepare the correct refund statement — Statement 3 for export under LUT, Statement 2 for export with IGST payment — reconcile it against the GSTR-1 export turnover and the foreign-exchange evidence, obtain the Chartered Accountant certificate above the prescribed threshold, and file Form RFD-01 within two years of the relevant date under Section 54 of the CGST Act. We then coordinate with the jurisdictional refund officer, respond to any deficiency memo, and track the claim through to bank disbursal. Our GST refund service covers the wider refund framework.
Statement 2 / Statement 3 · Section 54

Broader Practice

Our Broader GST & Export Advisory Services

Service export refunds sit inside a wider compliance and export map. Our complete practice covers:

GST Refund ServicesAll Section 54 refund categories.
GST ComplianceHub for all GST services.
GSTR-3B FilingMonthly summary return and ITC claim.
GSTR-1 FilingOutward supply and export turnover return.
GSTR-2B Reconciliation & ITC ReviewITC eligibility review.
GST RegistrationGST registration for exporters.
Import Export Code (IEC)IEC registration for exporters.
FEMA AdvisoryForeign exchange compliance for exporters.
US Tax ImplicationsCross-border tax for service businesses.
Transfer Pricing LawsCross-border related-party pricing.
GST AuditGST audit and reconciliation.
GST NoticeGST notice response and representation.

Frequently Asked Questions

Common Questions on Service Export Refunds

What qualifies as an export of services under GST?
Section 2(6) of the IGST Act 2017 defines export of services, and all five conditions must hold together. The supplier must be in India, the recipient outside India, the place of supply outside India, the payment received in convertible foreign exchange (or INR where the RBI permits), and the supplier and recipient must not be merely establishments of the same distinct person. If even one condition fails, the service is not an export and the refund is unavailable. Our GST refund services page covers the broader refund framework.
How does a service exporter claim a GST refund?
Because exports are zero-rated under Section 16 of the IGST Act, the export carries no GST but credit accumulates on inputs. Under the Letter of Undertaking route, the exporter files an LUT, exports without paying IGST, and claims a refund of the accumulated unutilised input tax credit through Form RFD-01 under Section 54 of the CGST Act 2017. The alternative IGST-payment route blocks cash until the refund arrives. The LUT route is generally preferred for services since there is no shipping bill. Our GSTR-3B filing page covers the underlying returns.
What is the role of place of supply in service export refunds?
Place of supply is one of the five conditions and often the hardest to establish. For cross-border services it is determined under Section 13 of the IGST Act 2017. The default rule is the recipient's location, which supports the export, but exceptions shift it back to India — services linked to immovable property, services performed in India, event admission, and intermediary services. If the place of supply is in India, the export status fails. For digital and consulting services, the documentation must consistently support the overseas place of supply. Our GST compliance page covers the broader framework.
Why is a FIRC or BRC important for service export refunds?
A Foreign Inward Remittance Certificate or Bank Realisation Certificate is the primary evidence that the exporter received the export proceeds in convertible foreign exchange, satisfying the fourth condition of Section 2(6). Because services have no shipping bill, this certificate is the central proof that an export occurred and was paid for. The refund officer relies on it to release the refund. The exporter must realise the foreign exchange within the FEMA timeline. INR received through a Special Rupee Vostro Account also qualifies. Our FEMA advisory page covers foreign-exchange compliance.
Do intermediary services qualify as export of services?
Intermediary services generally do not qualify. An intermediary arranges or facilitates a supply between two other persons without supplying on its own account. Under the place-of-supply rules of the IGST Act 2017, the place of supply for an intermediary is the location of the supplier — in India. Because the place of supply is in India, the third condition of Section 2(6) fails, and the service is not an export even where the recipient is overseas and pays in foreign exchange. This commonly causes refund denials. Our GST notice page covers disputes on classification.
Does a service exporter need GST registration and an LUT?
A service exporter generally needs GST registration to claim a refund, because the refund operates through the registered taxpayer's returns and electronic credit ledger. Even below the normal threshold, registration is effectively required to file Form RFD-01. To export without paying IGST, a valid Letter of Undertaking is also needed, filed on the GST portal and renewed each financial year. A lapsed LUT forces the exporter onto the IGST-payment route. Our GST registration page covers exporter registration.
What documents support a service export refund claim?
The claim is supported by export invoices marked as a supply meant for export, the valid Letter of Undertaking, and the Foreign Inward Remittance Certificates or Bank Realisation Certificates. It also needs the filed GSTR-1 with export turnover and GSTR-3B, the prescribed statement (Statement 3 for export under LUT, Statement 2 for export with IGST payment), the input tax credit working, and an unjust enrichment declaration. A Chartered Accountant certificate is required above the prescribed threshold, and the overseas contracts support the place-of-supply position. Our GST audit page covers the documentation discipline.

Need a Service Export GST Refund? Talk to Our GST Team.

Specialised GST refund services on export of services for IT and software exporters, consultants, SaaS providers, professional firms, and freelancers — five-condition test, place-of-supply and intermediary analysis, LUT filing, FIRC/BRC reconciliation, and Form RFD-01 filing through to disbursal, delivered by qualified Chartered Accountants.

Get in Touch
📞 +91 98190 00511 · +91 91670 58000 · +91 98190 00445
✉ nainitsavla@savlagroup.in · 📍 N D Savla & Associates, Mumbai

Popular Cities

Popular Cities

Popular Cities

Popular Cities

©2026.  ND Savla & Associates. All Rights Reserved.

Privacy Policy

WhatsApp Call Email