An IT or SaaS company in Mumbai typically has a domestic revenue stream and an export stream. The domestic stream is taxable at 18%. The export stream is zero-rated if the five Section 2(6) conditions are satisfied, and the company can claim refund of accumulated ITC. The company also imports SaaS tools—Slack, HubSpot, AWS, Figma—on which it pays IGST under reverse charge and claims ITC.
The Export Zero-Rating Architecture
The company should obtain a LUT, issue zero-rated invoices with the correct declaration, maintain FIRC/bank realisation evidence, and file the refund claim with the export invoices, GSTR-1, GSTR-3B and the Statement 3A. The establishment condition is the key risk: a foreign subsidiary is not the same person if it is a separate legal entity, but a foreign branch of the Indian company is an establishment of the same person and the supply is not an export.
The Imported-SaaS Reverse Charge
Imported SaaS subscriptions attract 18% IGST under reverse charge. The company must self-invoice, pay the tax and claim ITC where eligible. The credit is available in the regular regime; a company in the composition scheme cannot claim it. The company should maintain the import register and reconcile the RCM payments with the GSTR-3B.
The ITC Refund
The accumulated ITC on inputs used for zero-rated exports is refundable. The refund claim must reconcile the export invoices, the credit ledger and the bank realisation. A deficiency memo should be answered with the complete Rule 89(2) document set.
What the Consultant Does
The consultant assists with the LUT, the export documentation, the RCM compliance, the refund claim and the notice response. The value is in the reconciliation between the export data, the ITC ledger and the refund application.
Call to Action: We advise Mumbai IT and SaaS companies on export zero-rating, imported-SaaS RCM and ITC refunds. For an IT/SaaS review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.