GST implications of cross-border transactions — whether you are an NRI receiving Indian income, a foreign entity providing services into India, or an Indian business exporting services globally — are governed by a complex web of place of supply rules, intermediary provisions, and OIDAR regulations that most practitioners do not fully understand.
Section 13 IGST ActOIDAR ServicesLUT / Bond for ExportersImport of Services — RCMVirtual Consultations AvailableNRI-Friendly — Time Zone Flexible
Pan-India
+ NRI VIRTUAL MANDATES
50+
CROSS-BORDER GST MANDATES
Sec 13
PLACE OF SUPPLY SPECIALIST
Virtual
CONSULTS — ANY TIME ZONE
WHO THIS SERVICE IS FOR
Cross-Border GST Issues Arise Across These Client Profiles
India's GST law applies to cross-border transactions in ways that frequently surprise both Indian residents doing business abroad and NRIs engaged with India. The intersection of IGST Act place of supply rules, Reverse Charge Mechanism obligations, and export of services conditions creates a compliance landscape that demands specialist navigation.
NRIs with Indian Business Income
Non-Resident Indians receiving fees, royalties, rental income, or professional income from India — where the service or transaction may attract GST implications for either party.
GST registration need assessment
RCM liability on Indian recipient
FEMA and GST intersection
Indian IT / Service Exporters
Indian companies or freelancers providing software, consulting, creative, or professional services to overseas clients — navigating the export of services conditions and refund entitlements.
5-condition export of services test
Intermediary trap — Section 13(8)(b)
LUT filing and ITC refund claims
Foreign Companies with Indian Operations
Foreign entities providing services to Indian customers, importing services, or operating through Indian subsidiaries — with GST registration, OIDAR compliance, and RCM obligations arising from these structures.
OIDAR registration & compliance
Import of services — RCM discharge
PE and establishment questions
Exporters of Goods
Manufacturers and traders exporting physical goods — managing IGST refunds on shipping bills, LUT/Bond compliance, and ITC accumulation under the zero-rated supply framework.
IGST refund on shipping bill
LUT under Rule 96A
ITC refund without IGST payment
Indian Businesses Importing Services
Indian companies receiving services from foreign providers — legal, consulting, software, cloud, marketing — where the Indian recipient must discharge GST under Reverse Charge Mechanism regardless of whether the foreign supplier is GST-registered.
RCM liability identification
Input tax credit on RCM paid
Section 13 place of supply analysis
Digital / Online Service Providers
Overseas providers of digital services — streaming, software-as-a-service, online education, gaming, e-commerce — supplying to Indian consumers and subject to mandatory OIDAR GST registration and compliance.
OIDAR registration mandate
GST collection on Indian customers
Place of supply — Section 13(12)
LEGAL FRAMEWORK
The IGST Act Framework for Cross-Border Transactions
SECTION 13 — IGST ACT, 2017 — PLACE OF SUPPLY OF SERVICES WHERE LOCATION OF SUPPLIER OR RECIPIENT IS OUTSIDE INDIA
"The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. The place of supply of services, except the services specified in sub-sections (3) to (13), shall be the location of the recipient of services."
SECTION 2(6) — IGST ACT — EXPORT OF SERVICES — ALL FIVE CONDITIONS MUST BE SATISFIED
"Export of services means the supply of any service when — (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of the service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; (v) the supplier of service and the recipient of service are not merely establishments of a distinct person."
SECTION 7(4) READ WITH SECTION 5(3) — IGST ACT — IMPORT OF SERVICES UNDER RCM
"Supply of services imported into the territory of India shall be treated as inter-State supply — and shall attract integrated tax on reverse charge basis."
PLACE OF SUPPLY — THE DECISIVE QUESTION
Place of Supply Determines Whether GST Applies at All
In every cross-border transaction, the first and most critical question is the determination of place of supply under Section 13 of the IGST Act. The place of supply determines whether the supply is taxable in India, whether it qualifies as an export of services, and consequently whether a refund of ITC is available. Getting this wrong — in either direction — creates either an unintended tax liability or a missed refund entitlement.
13
SECTION 13(2) — DEFAULT RULE
Place of Supply = Location of Recipient
The default rule under Section 13(2) — applicable to most services where no specific sub-section overrides — places the supply at the location of the recipient. If the recipient is outside India, the place of supply is outside India, and the supply qualifies as an export of services (subject to all five conditions under Section 2(6) being satisfied).
IT services, consulting, accounting, legal, creative services to overseas clients
Management consulting services to foreign holding companies
Software development for overseas product companies
13
SPECIFIC OVERRIDES — SECTIONS 13(3) TO 13(13)
Specific Rules Override the Default
Sections 13(3) through 13(13) override the default rule for specific categories of services — and many of these place the supply in India even when the recipient is abroad. These overrides are the most litigated areas of cross-border GST and require careful category-by-category analysis.
Section 13(3) — Services directly related to immovable property in India
Section 13(5) — Radio / TV broadcasting originating from India
Section 13(8)(b) — Intermediary services — place of supply is India regardless
Section 13(12) — OIDAR services — place of supply is location of recipient
MOST LITIGATED — SECTION 13(8)(b) IGST ACT
The Intermediary Trap — Why Indian Service Exporters Lose Refunds
Section 13(8)(b) of the IGST Act provides that the place of supply of intermediary services shall be the location of the supplier — which means India. If an Indian service provider is classified as an intermediary between an overseas principal and an Indian or overseas customer, its services cannot qualify as export of services regardless of whether the recipient is abroad, payment is received in foreign exchange, or all other conditions are satisfied. The ITC refund claim on such services fails entirely. This is the most heavily litigated provision in cross-border GST — and the outcome of every export of services refund claim depends critically on whether the Indian service provider falls within or outside the intermediary definition.
INTERMEDIARY — DEFINITION
Section 2(13) IGST Act
A broker, agent, or any other person who arranges or facilitates the supply of goods or services between two or more persons — but does not include a person who supplies such goods or services on his own account.
CONSEQUENCE IF CLASSIFIED AS INTERMEDIARY
Place of Supply = India — No Export — No Refund
Full IGST / CGST + SGST applies on the service. Zero-rated supply status is lost. All ITC refund claims fail. Potential demand for tax not paid on prior periods.
Any Indian entity that facilitates a transaction between an overseas principal and a third party — rather than supplying on its own account — is at risk of intermediary classification.
We provide a written opinion on intermediary risk, advise on contract and service structure to establish own-account supply, and defend classification positions in audit and SCN proceedings.
ONLINE / DIGITAL SERVICES
OIDAR Services — GST Obligations for Foreign Digital Providers
Online Information and Database Access or Retrieval (OIDAR) services — defined under Section 2(17) of the IGST Act — are digital services delivered entirely over the internet with minimal human intervention. Foreign providers of OIDAR services to Indian non-business recipients (B2C) are mandatorily required to register under GST in India and collect GST from their Indian customers, regardless of whether they have any physical presence in India.
OIDAR — WHAT IT COVERS
Categories of OIDAR Services
Streaming (music, video, gaming), software-as-a-service, cloud storage, online education, digital content subscriptions, website hosting, online advertising, e-publishing, database access — any service delivered automatically over the internet with no material human involvement.
OIDAR — REGISTRATION OBLIGATION
Mandatory GST Registration for Foreign Providers
Foreign OIDAR providers supplying to Indian non-business consumers must register under the Simplified Registration Scheme for OIDAR providers — file quarterly GSTR-5A returns, collect IGST at 18%, and remit to the Indian government. Non-compliance attracts demand and penalty.
OIDAR — B2B DISTINCTION
B2B OIDAR — RCM on Indian Recipient
Where OIDAR services are supplied to a registered Indian business (B2B), the obligation shifts — the Indian business recipient must discharge IGST under Reverse Charge Mechanism. The foreign provider is not required to register. The Indian recipient can then claim ITC on the RCM paid if the service is used for business purposes.
IMPORT OF SERVICES
Import of Services — RCM Liability for Indian Businesses
Every Indian registered business that receives services from a foreign provider — irrespective of whether the foreign provider is GST-registered or not — is required to discharge IGST on that import of services under the Reverse Charge Mechanism. The obligation arises automatically on the date of payment to the foreign provider or 60 days from the invoice date, whichever is earlier. Non-discharge of RCM on imported services is one of the most consistently raised findings in GST audits.
RCM on Imported Services Is Non-Negotiable — And Consistently Missed
Legal fees to foreign law firms, cloud computing from AWS or Google, software licences from Microsoft or Adobe, consulting from overseas parent companies, management fees from holding companies — all attract RCM under GST when the Indian business is the registered recipient. The Indian company must self-invoice, pay the IGST, and file GSTR-3B. The good news is that in most cases, the same IGST paid under RCM is immediately available as ITC in the same tax period — making it a cash-neutral transaction if the business is engaged in taxable supplies. However, where there is no corresponding output liability, the RCM creates a genuine cash cost. Vertax Partners conducts a complete RCM compliance audit and prepares period-wise liability computations for businesses that have under-complied.
NRI-FRIENDLY SERVICE
Complete GST Advisory Delivered Virtually — Anywhere in the World
Vertax Partners serves NRI and overseas clients through a fully virtual mandate structure. All consultations, document review, advisory opinions, return filing, refund applications, and litigation representation are managed remotely — with no requirement for physical presence in India. We work across time zones and provide all deliverables in formats that are compliant with Indian GST portal requirements.
Video consultations — Zoom, Google Meet, WhatsApp — at your preferred time
Digital document collection and GST portal filing — no physical paper required
Written advisory opinions delivered by email — for banking and compliance records
DSC and authorisation management — we handle the digital signature infrastructure
Real-time updates on refund status, audit notices, and portal communications
LUT filing, refund applications, and litigation replies — all handled remotely
OUR ADVISORY SERVICES
What We Handle — Cross-Border GST Service Matrix
SERVICE
WHO IT IS FOR
KEY DELIVERABLE
MODE
Export of Services — Classification Opinion
Assessment of all 5 conditions under Sec 2(6) and intermediary risk under Sec 13(8)(b)
IT / BPO / Consulting exporters
Written legal opinion with contract review and classification position
VIRTUAL
LUT Filing Under Rule 96A
Annual Letter of Undertaking for export without IGST payment — prerequisite for ITC refund route
All service and goods exporters
LUT filed on GST portal before commencement of exports
VIRTUAL
ITC Refund — Export of Services
Section 54(3) refund of accumulated ITC on zero-rated service exports under LUT
Indian service exporters
RFD-01 filing with Statement 3 and complete documentation
PAN-INDIA
Import of Services — RCM Compliance Audit
Period-wise identification of missed RCM liability on imported services — with voluntary compliance strategy
Determination of whether NRI income from India creates a GST registration obligation — and for which entity
NRIs with India-sourced income
Written advisory on registration obligation with FEMA and IGST cross-reference
VIRTUAL
Cross-Border Audit & SCN Defence
Defence of GST demands arising from export of services disqualification, RCM non-compliance, or intermediary reclassification
Exporters under audit or SCN
ADT-02 / SCN reply with full statutory and judicial defence
URGENT ENGAGEMENT
Place of Supply Opinion — Section 13 Analysis
Detailed analysis of applicable sub-section under Section 13 for specific transaction structures — particularly related party and group company transactions
MNCs, group companies, related party transactions
Written opinion with transaction-specific place of supply determination
VIRTUAL
OUR PROCESS
How We Onboard and Handle NRI & Cross-Border Mandates
01
Virtual Intake Consultation
Video call to understand the transaction structure, entity positions, geographies involved, and current compliance status. Time-zone flexible.
DAY 1
02
Document Collection
Secure collection of contracts, invoices, FIRA, GSTR data, existing registration details, and correspondence — all via digital channels.
DAY 1–3
03
Advisory Opinion / Risk Assessment
Written advisory on place of supply, export of services eligibility, intermediary risk, RCM obligations, and OIDAR applicability.
DAY 3–7
04
Compliance Action
LUT filing, registration applications, RFD-01 refund applications, GSTR-5A filings, or RCM voluntary compliance — executed on the GST portal.
DAY 7–15
05
Ongoing Monitoring
Portal notice monitoring, refund status tracking, audit notice alert, and annual LUT renewal — with proactive communication on regulatory changes.
ONGOING
FREQUENTLY ASKED
Cross-Border GST Questions — Answered
I am an NRI receiving professional fees from an Indian company for advisory services I provide from abroad. Does GST apply?
The GST analysis on this transaction turns on place of supply under Section 13 of the IGST Act. Under the default rule of Section 13(2), the place of supply of services where the recipient is in India is the location of the recipient — which is India. However, where you as the NRI supplier are located outside India and the service is a professional or consulting service, the place of supply is the location of the recipient under Section 13(2) — which is India — and the Indian company paying you may have an RCM obligation on the import of services. The Indian company must self-assess and discharge IGST under RCM on the fees paid to you as a foreign service provider. Whether you as an NRI need to register in India separately depends on whether you are making any supply from within India. This requires a fact-specific assessment — contact us for a consultation.
Our Indian company provides marketing support services to a foreign principal — we help them find customers in India. Are we an intermediary?
This is precisely the scenario that Section 13(8)(b) of the IGST Act targets — and the answer is highly fact-specific. If your Indian company is arranging or facilitating the supply between the foreign principal and the Indian customer — introducing leads, processing orders on behalf of the principal, or earning a commission on transactions — you are likely classified as an intermediary. In that case, the place of supply is India, your service does not qualify as an export of services, and all GST paid on your inputs cannot be refunded. However, if you are providing the marketing service on your own account — where your deliverable is a service output (market research, brand promotion, customer acquisition strategy) rather than a transaction facilitation — you may be able to establish that you are not an intermediary. The distinction lies in whether you arrange supply between two parties or deliver an independent service output. Vertax Partners provides a detailed written opinion with contract review for every client in this situation.
We are an Indian IT company exporting software services to a US client. We file returns under LUT — but our ITC refund claims are being rejected. What is going wrong?
ITC refund rejections for service exporters under LUT typically arise from one or more of these grounds: the department classifying the services as intermediary under Section 13(8)(b) and disqualifying export status; GSTR-1 not reflecting the export invoices correctly; GSTR-2B reconciliation mismatch on input ITC; FIRA (Foreign Inward Remittance Advice) not available for all invoices in the claim period; Statement 3 computation errors; or the unjust enrichment objection being raised by the officer. Vertax Partners conducts a complete diagnostic of every rejected refund claim — identifies the specific ground of rejection, prepares a revised RFD-01 where appropriate, and where the rejection is on legal grounds, challenges it through a formal reply and appeal. We have handled multiple export of services refund appeals including intermediary classification disputes.
We are a foreign SaaS company selling subscriptions to Indian businesses and individual consumers. What are our GST obligations?
Your obligations differ based on whether your Indian customer is a registered business (B2B) or an individual / unregistered consumer (B2C). For B2C sales — where the Indian customer is an individual or unregistered entity — your services are OIDAR services and you are required to register under the Simplified OIDAR Registration Scheme in India, collect IGST at 18% from the Indian customer, and file quarterly GSTR-5A returns. For B2B sales — where the Indian customer is a GST-registered business — the Indian business recipient is responsible for discharging IGST under RCM on the subscription fee, and you as the foreign provider are not required to register. Most SaaS companies serving a mix of B2B and B2C Indian customers need to assess their customer base, segregate B2B and B2C revenue, and structure their compliance accordingly. Vertax Partners handles OIDAR registration, GSTR-5A compliance, and ongoing advisory for foreign digital service providers.
NRI or Cross-Border GST Query?
We handle cross-border GST mandates entirely virtually — consultations, advisory, filing, and litigation — regardless of your location or time zone.