This trips up a lot of Indian remote workers, because zero-rated is not the same as exempt.
The core distinction
Zero-rated means the tax rate is nil but the supply is still within the GST system. That can mean registering, filing returns and issuing compliant invoices even though no tax is collected.
Conditions usually attached
- The recipient is located outside India
- Payment is received in convertible foreign exchange
- The supplier and recipient are not merely establishments of the same person
- You hold the bank documentation evidencing receipt
Keep the paperwork
Invoices, foreign inward remittance advice and bank statements. These are what substantiate the export treatment if questioned.
Confirm your own position
Thresholds, LUT requirements and filing obligations change. One session with a chartered accountant who handles export of services is worth it. This is general orientation, not tax advice.
Common questions
Do Indian freelancers need GST registration for foreign clients?
Often yes, even when the supply is zero-rated. The conditions depend on turnover and the nature of the service, so confirm with a CA.
What is an LUT?
A Letter of Undertaking that allows export of services without paying IGST upfront. It is filed annually.