Indian fund managers managing offshore capital face a critical GST question: do their management fees qualify as zero-rated exports? If the conditions under Section 2(6) of the IGST Act are met, the fees are zero-rated, preserving working capital. If not, 18% GST applies.
This article explains the structuring options.
Export of Services Conditions
- Supplier located in India.
- Recipient located outside India.
- Place of supply outside India.
- Payment in convertible foreign exchange.
- Not merely establishments of a distinct person.
LUT Filing
- Form RFD-11 annually.
- Avoids IGST payment upfront.
- Preserves working capital.
GIFT City Structuring
- GST exemption on management fees and carried interest.
- FME registration with IFSCA.
- Tax holiday.
Documentation
- FIRC/FIRMS.
- Export invoices.
- GSTR-1 reporting.
Conclusion
Fund managers with offshore investors need proactive GST structuring. A CA firm with cross-border expertise ensures zero-rating and optimises tax position.
At Anuj Desai & Associates, we provide GST structuring for fund managers with offshore investors. Our team handles export qualification, LUT filing, and GIFT City structuring.
For a confidential consultation, contact us at office@anujdesaiassociates.com or call 9619456656. Visit our website at https://anujdesaiassociates.com or connect with our founder on LinkedIn at linkedin.com/in/ca-anuj-desai-122547230.