GST for IT, SaaS and software exports
Almost every dispute in this sector is a place of supply dispute wearing a different name.
Technology sector exposure is concentrated in the export of services conditions under Section 2(6) of the IGST Act, intermediary characterisation under Section 13(8)(b), the distinction between a branch and a subsidiary of a foreign group, reverse charge on inbound software subscriptions and group charges, the classification of software as goods or services and the rate consequence, and the refund mechanics for a business whose credit accumulates structurally.
Export, and the five conditions
All five conditions must be satisfied, and the ones that fail in practice are the place of supply and the receipt in convertible foreign exchange.
An Indian branch supplying to its foreign head office is not an export, because they are establishments of a distinct person. A subsidiary supplying to its parent can be.
Marketing, sales support and reseller arrangements raise the intermediary question. A principal to principal service agreement with a fixed or cost plus fee is materially safer than a commission on third party sales, and Circular 159/15/2021-GST and Genpact support the position.
Onsite services performed at a customer's premises abroad, and services performed in India for a foreign customer's Indian users, need the recipient identified in the contract.
The remittance file, indexed to invoices, is the document refund claims are decided on.
Inbound and classification
Software subscriptions, cloud, hosting, marketing platforms and developer tools purchased from foreign vendors are imports of services on reverse charge, paid in cash with a self invoice. Credit card purchases are the most commonly missed category.
Group charges — management fees, IT recharges, cost allocations — are imports of services with a time of supply that can precede payment for associated enterprises.
Software supplied electronically is generally treated as a service; software on media raises a goods question. The rate and the place of supply differ.
Composite arrangements of licence, implementation, support and hosting require a principal supply analysis documented at contracting.
The controls
A contract review checklist covering the five export conditions, the intermediary risk and the recipient's establishment.
A monthly foreign payment extract reconciled to the reverse charge register, including credit card and expense report purchases.
A monthly export refund filing with the remittance file, rather than an annual claim.
A place of supply note per service line, signed off by the business on the facts.
What to do on Monday
Run every export contract through a five condition and intermediary checklist before signing.
Reconcile all foreign payments, including card purchases, to the reverse charge register monthly.
File export refunds monthly with an indexed remittance file.
Keep a place of supply note per service line with business sign off on the facts.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Is our back office work for the parent an intermediary service?
Not where it is performed on a principal to principal basis for the parent. The circular and Genpact support that.
Can a branch export to its head office?
No. They are establishments of a distinct person and the fifth condition fails.
Are foreign software subscriptions taxable?
Yes, as import of services on reverse charge, paid in cash with a self invoice.
Is software goods or services?
Supplied electronically it is generally a service; on media the goods question arises, with rate and place of supply consequences.
Why are our refunds delayed?
Usually the remittance evidence or the invoice to GSTR-1 match. File monthly with the file indexed.
In this cluster
- GST for manufacturing: the exposure map
- GST for pharmaceuticals and life sciences
- GST for automotive and auto components
- GST for textiles and apparel
- GST for logistics, warehousing and transport
- GST for banking, NBFC and financial services
- GST for insurance after the individual policy exemption
- GST for hospitality, hotels and travel
- GST for education and edtech
- GST for healthcare and hospitals
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.