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Is GST registration required for software service exports

26 January 2023

I am working for a USA based startup software company. Since they are not registered as any entity in India, I as working under a contract as a software consultant. My total receipts as a software consultant for the current year has exceeded 40 lakhs.
I understand that software service export is a zero rated supply. My entire business turnover is completely software service exports only. But am I liable register for GST since my turnover exceeds 40 lakhs? Do I have to file GST returns declaring my export turnover, even though I don't have to pay any GST.

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13 Replies

Manish (CA) (1174 Points)
Replied 26 January 2023

Not required if you don't want to claim any refund of input GST.

1 Like

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Karthick J (86 Points)
Replied 26 January 2023

Thanks for the clarification!

CA Raj Doshi (Practising CA) (8924 Points)
Replied 27 January 2023

GST Registration is mandatory for export of services in India. According to a government FAQ released on Twitter and dated December 22nd, 2017, export services are interstate taxable supplies and must have GST Registration.

Further, since the amount exceeds 20 lakhs p.a, you are liable for gst registration

1 Like

Karthick J (86 Points)
Replied 27 January 2023

Thanks for answering it with detailed reference.

I looked at the said tweet, dated Dec 22, 2017. It says,
Question : I export services but turnover is below threshold. Should I take registration?
Answer: Yes, as it is an inter-State supply, you are liable to take mandatory registration under section 24

But I am not 100% sure, if this tweet should be taken at face value. Because as per Notification No.10/2017 Integrated Tax dated on 13th October, 2017, GST registration is exempted when IGST taxable turnover is lesser than 20 lakhs. So this FAQ answer directly conflicts with the official notification issued at an earlier date.

I looked at section 24, It lists "persons making any inter-State taxable supply;". But export of services is non-taxable (zero-rated supply). So one can interpret that export of services doesn't fall under section 24.

But I would take your advice and get GST registration, as we cannot risk arguing with the GST officers if they send us any notice.

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Karthick J (86 Points)
Replied 27 January 2023

As I understand GST authorities will definitely send a notice for non-registration sooner or later based on the turnover data shared by IT department. (In the IT returns we won't mention whether it is exports or domestic supply).

Maybe it will be helpful if somebody doing service exports shares their experience on receiving notice from GST authorities for non-registration and if they succeeded or failed in convincing them after mentioning they do exports-only. Practical experience is more applicable/legitimate than the ambiguous/inaccurate tweet.

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prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 27 January 2023

Take registration under GST as early as possible .

1 Like

CA Raj Doshi (Practising CA) (8924 Points)
Replied 27 January 2023

Exports are deemed inter state supplies. Interstate supply( which includes exports ) of goods required GST registration from Re. 1.

However, Interstate supply of services ( which includes export of services ) have been given relaxation from registration upto 20 lakhs turnover.

The issue is that Turnover over 20 lakhs will become liable for GST in absence of LUT exemption. Accordingly you will have to shell out 18% GST plus interest.

Penalty for non registration will also become applicable.

Export of services is zero rated supplies but they are also deemed inter state supplies which makes registration necessary.

Zero rated supplies ( export sales of services ) can be done under LUT which is 0%GST. But in case of no GST registration it means yoi cannot apply for LUT. Hence once you are liable for GST registration, subsequent Turnover will become liable for GST. and in absence of LUT, it will be liable to 18% GST from your own pocket.

You may contact on raj @ rcdco.in for further advice

1 Like

sabyasachi mukherjee (27574 Points)
Replied 27 January 2023

Generally export is exempted. Since the turnover exceeds basic exemption threshold it is taxable.

1 Like

CA. Chikkerur C R (PRACTICE) (3584 Points)
Replied 27 January 2023

Since it is Export, GST and IEC is required. Rs 40 lakh /Rs 20 lakh Turnover is not criteria applicable to exports. Must need to get register GST and IEC

1 Like

sabyasachi mukherjee (27574 Points)
Replied 27 January 2023

Rs. 40 lakhs and above so it is always exempted.

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Vishal Tanwar (2 Points)
Replied 25 July 2023

Since your turnover is more than 20 Lakhs you are required to take registration

Also export is taxable supply, but zero rate

Yash (Others) (25 Points)
Replied 25 October 2023

Section 23 is not applicable here - 100% Nil and expent services are excluded.

Section 23 - Person who is not liable for registration under GST | GST Gyaan

s it correct that person dealing exclusively in NIL rated or exempt goods/ services liable to register if turnover > 20/10 Lakh?			There is no liability of registration if the person is dealing with 100% exempt supplies.
31	Is registration necessary if only interstate supply of Nil rated goods is being made?			If exclusively making supplies of Nil rated supplies, registration is not compulsory. Kindly refer section 23 of CGST Act.

Yash (Others) (25 Points)
Replied 25 October 2023

Section 23 is not applicable here - 100% Nil and expent services are excluded.

Section 23 - Person who is not liable for registration under GST | GST Gyaan

s it correct that person dealing exclusively in NIL rated or exempt goods/ services liable to register if turnover > 20/10 Lakh?			There is no liability of registration if the person is dealing with 100% exempt supplies.
31	Is registration necessary if only interstate supply of Nil rated goods is being made?			If exclusively making supplies of Nil rated supplies, registration is not compulsory. Kindly refer section 23 of CGST Act.