GST Refund — Export of Services · Panaji, Goa
GST refund on export of services in Goa — LUT filing, IGST refund on zero-rated service exports, ITC refund via RFD-01, place of supply determination, and refund application tracking by qualified CAs in Panaji.
Overview
Export of services is a zero-rated supply under Section 16(1)(b) of the IGST Act — no GST is charged to the foreign client, and the service exporter is entitled to a full refund of accumulated ITC on inputs and input services used in providing the exported service. There are two routes: (a) pay IGST and claim a refund, or (b) file a Letter of Undertaking (LUT) and export without GST, then claim an ITC refund via Form RFD-01. The LUT route is far more cash-flow efficient and is used by virtually all service exporters.
For a supply to qualify as export of services, all five conditions of Section 2(6) of the IGST Act must be satisfied: the supplier is in India; the recipient is outside India; the place of supply is outside India; payment is received in convertible foreign exchange (or Indian rupees where RBI permits); and the supplier and recipient are not merely establishments of the same person. Our GST for freelancers and GST refund of goods pages cover related export scenarios.
What we cover
LUT filing, RFD-01 application, FIRA/FIRC documentation, and refund tracking — complete service export refund advisory.
Talk to our CA →Verifying that the supply meets all five conditions of Section 2(6) IGST Act — particularly place of supply (outside India) and foreign exchange receipt — before filing the refund application.
Filing the annual Letter of Undertaking on the GST portal (Form RFD-11) before the start of each financial year — enabling the exporter to provide services to foreign clients without charging IGST.
Filing Form RFD-01 with Statement 4 (zero-rated supply of services without IGST payment) — computing refund using the Rule 89(4) formula: (Export Service Turnover × Net ITC) ÷ Adjusted Total Turnover.
Compiling Foreign Inward Remittance Advice (FIRA) or Foreign Inward Remittance Certificate (FIRC) from the bank — proof of foreign exchange receipt required as supporting document for the refund application.
Determining the correct place of supply for each service category exported — particularly for intermediary services, IT services, consulting, and financial services — where wrong classification can disqualify the supply from zero-rating.
Responding to RFD-03 deficiency memos, preparing representations for partial refund orders, and tracking the refund from ARN generation to bank credit — escalating to higher authorities for delayed disbursements.
Service export refund — key numbers
Export of services is zero-rated — no IGST charged to foreign client; accumulated ITC is fully refundable via RFD-01.
Letter of Undertaking (Form RFD-11) must be filed before the new financial year begins to export without paying IGST.
Refund = (Export Service Turnover × Net ITC) ÷ Adjusted Total Turnover. Proportionate ITC attributable to exports is refunded.
Refund application must be filed within 2 years of the end of the quarter in which the refund entitlement arises.
Frequently asked questions
All five conditions of Section 2(6) of the IGST Act must be met simultaneously: (1) the supplier of service is located in India; (2) the recipient of service is located outside India; (3) the place of supply is outside India; (4) the payment for the service has been received by the supplier in convertible foreign exchange or in Indian rupees where permitted by RBI; and (5) the supplier and recipient are not merely establishments of a distinct person (i.e., they are not related parties for place of supply purposes).
An 'intermediary' under Section 2(13) of the IGST Act is a person who arranges or facilitates the supply of goods or services between two parties — acting as a broker or agent, not as a principal. The place of supply of intermediary services is the location of the intermediary (i.e., India) — making it a domestic supply taxable at 18% IGST, not a zero-rated export. Many Indian back-office service providers have faced classification disputes as intermediaries. Careful contract and transaction structure analysis is essential.
Required documents for Form RFD-01 (Statement 4): copy of GSTR-3B for the relevant periods; FIRA or FIRC from the bank evidencing receipt of foreign exchange; invoices raised on the foreign client; LUT acknowledgment; computation of refund amount per Rule 89(4) formula; and statement of net ITC availed during the period. The bank FIRC must show the amount received in foreign currency and the date of credit — the amount must correspond to the invoice value.
Yes, in specified circumstances. RBI permits certain transactions in Indian rupees — notably exports to Nepal, Bhutan, and payments from Indian Embassies abroad. Additionally, Indian rupee payments in international trade settlement through Vostro accounts of foreign banks are being increasingly accepted. The supplier must obtain a specific RBI approval or operate under a permitted category — and must be able to demonstrate that the INR payment is equivalent to a foreign exchange transaction for GST refund purposes.
Under Section 54(7) of the CGST Act, the proper officer must issue a refund order (Form RFD-06) within 60 days of receipt of a complete and accurate RFD-01 application. If the refund is not sanctioned within 60 days, interest at 6% per annum is payable from the date of application to the date of payment. Where the refund is withheld without passing a proper order, the interest rate rises to 9% per annum.
Rule 89(4) applies a proportionate formula: Refund Amount = (Export Turnover of Services × Net ITC) ÷ Adjusted Total Turnover. 'Net ITC' is total ITC availed on inputs and input services (excluding ITC on capital goods used for exports). 'Adjusted Total Turnover' is total turnover minus exempt turnover minus turnover on which tax is paid by the recipient under RCM. The formula ensures the refund is proportionate to the share of export turnover in total business — domestic ITC is not refunded.
Related services
Zero-rated service exports entitle you to a full ITC refund — but the application, documentation, and officer follow-up require expertise. Our qualified CAs in Panaji, Goa manage the entire refund cycle from LUT to bank credit.