A service provider—consultant, agency, professional firm, IT company, freelancer—is taxable at 18% where registered and serving Indian clients. The threshold is ₹20 lakh. The export route (LUT, zero-rated invoice, FIRC, refund) is available for foreign clients. The ITC on office rent, software, professional services and equipment is eligible where the invoice is in the registered name.
The Registration Decision
A service provider below ₹20 lakh may not need to register, but voluntary registration can preserve ITC and satisfy clients who require a GST invoice. The decision should be modelled against the expected input tax and the client’s credit needs.
The Export Route
A service provider serving foreign clients should obtain a LUT, issue zero-rated invoices, maintain FIRC/bank realisation evidence and claim refund of accumulated ITC. The five Section 2(6) conditions apply; the establishment condition is critical for providers billing foreign affiliates.
The ITC Discipline
The service provider should ensure that invoices for rent, software, professional services and equipment are in the registered name with the correct GSTIN. Section 17(5) blocks credit on club memberships, personal consumption and specified items. The provider should maintain a reversal register for blocked items.
What the Consultant Does
The consultant assists with the registration decision, the export documentation and the ITC review. The value is in the documentation architecture that supports the provider’s credit and export positions.
Call to Action: We advise service providers on GST registration, export zero-rating and ITC discipline. For a service-provider review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.