You work for clients abroad and earn less than Rs. 20 lakh a year. Somebody has told you that exports need GST registration from the very first rupee, and that without an LUT you will be penalised later. Somebody else has told you GST does not apply to you at all.
The short answer: while your all-India turnover for the financial year stays within Rs. 20 lakh (Rs. 10 lakh in four States), you do not have to register for GST, and without a registration there is no LUT to file. The “register from the first rupee” advice was true for about three months in 2017. Here is where it came from, what still counts, and what changes when you cross the line.
Why people still say exporters must register
The argument runs in two steps, and both steps are real law:
- An export is treated as an inter-State supply: a supply where “the supplier is located in India and the place of supply is outside India” (IGST Act s.7(5)(a)).
- Section 24 of the CGST Act makes registration compulsory, whatever your turnover, for “persons making any inter-State taxable supply”.
Put together, those would catch every freelancer with one foreign client. That is why the advice exists. What it leaves out is the third step.
The exemption that has applied since 13 October 2017
Section 23(2) lets the Government exempt categories of people from registration “notwithstanding” sections 22 and 24. It used that power in Notification 10/2017-Integrated Tax, dated 13 October 2017, which exempts:
“…persons making inter-State supplies of taxable services and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year…”
Three details in that sentence matter:
- Services only. The exemption says “taxable services”. Someone shipping goods abroad is not covered by it.
- Rs. 10 lakh in four States. A 2019 amendment (Notification 03/2019-Integrated Tax) pointed the lower limit at the same list section 22 uses: Nagaland, Manipur, Mizoram and Tripura. Everywhere else it is Rs. 20 lakh. Why it is four and not the eleven most lists print.
- Only that category. The notification lifts the inter-State trigger. It does not lift section 24's other triggers, such as being liable to pay tax under reverse charge.
What counts toward the Rs. 20 lakh
“Aggregate turnover” (CGST Act s.2(6)) includes taxable supplies, exempt supplies, “exports of goods or services or both” and inter-State supplies, “to be computed on all India basis” under one PAN. In practice:
- Every foreign client counts, in full, at the invoiced value before any platform fee.
- Indian clients count too, across every State you work from.
- It is the financial year, April to March. Not a running twelve months, and not the calendar year.
- Left out: purchases on which you pay tax under reverse charge, and the GST itself.
What your invoice should say while you are unregistered
A plain invoice: your name and address, the client's name, address and country, what you did, the amount and currency. Three things stay off it:
- No GSTIN, because you do not have one.
- No tax line. An unregistered person “shall not collect” any amount by way of tax (CGST Act s.32(1)).
- No “supply meant for export under LUT” endorsement. There is no LUT behind it, so printing one would be a false statement.
And do not call it a bill of supply. That is a document for a registered person supplying exempt services or paying composition tax, and it carries their GSTIN. Exports are zero-rated, not exempt, so not even a registered exporter issues one. More on what an unregistered invoice should look like.
GST is not the only rule that runs off your invoice. RBI's new export regulations, in force from 1 October 2026, count from the invoice date too, and your bank may ask about them. What the EDF is and whether it applies to you.
The day you cross Rs. 20 lakh
- Apply within 30 days (CGST Act s.25(1)). If you do, registration takes effect from the day you became liable. If you apply later, it takes effect only from the date it is granted (CGST Rule 10), which leaves a gap that is much harder to tidy up.
- File an LUT before your next export invoice. Only a registered person can file one, and Rule 96A wants it in place “prior to export”. It is accepted as soon as the portal gives you an acknowledgement number (ARN).
- Endorse your export invoices. Rule 46 asks for “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, with the recipient's name and address, the address of delivery and the country of destination. It does not ask for the LUT number; printing it is optional.
- Report exports in your returns: GSTR-1 Table 6A and GSTR-3B Table 3.1(b), quarterly if you opt for it.
If you have already exported without an LUT after registering, that situation has its own page. And for what changes on your domestic invoices, the registration guide covers the day you cross in full.
Registering voluntarily below the limit
The law allows it (CGST Act s.25(3)), and for some exporters it pays. The trade-off:
| You gain | You take on |
|---|---|
| A refund of the GST on your business costs — laptop, software, internet, co-working — because exports are zero-rated | GSTR-1 and GSTR-3B every period, quarterly if your turnover is below Rs. 5 crore |
| An LUT, so export invoices go out with no IGST from day one | A fresh LUT every financial year |
| Nothing extra on the exports themselves: they are zero-rated either way | GST on every invoice to an Indian client |
If your costs are small and your clients are all abroad, the refund may not be worth the returns. If you spend real money on equipment and software, run the numbers. A voluntary registration can be given up later (CGST Act s.29(1)(c)).
What is not settled, and we will not pretend it is
- Platform fees and reverse charge. Upwork and Fiverr charge you a fee. Whether an unregistered freelancer owes GST on it under reverse charge depends on whether that fee is an online information and database service and which entity bills it. No official text we have read settles that for a named platform.
- Payments that reach you in rupees. An export needs payment in foreign exchange or “in Indian rupees wherever permitted by the Reserve Bank of India”. CBIC has confirmed one rupee route (Special Rupee Vostro Accounts). Rupee payouts from Wise, PayPal or Payoneer have no official answer yet.
- Intermediaries. The Finance Act 2026 omitted the special place-of-supply rule for intermediary services, which used to keep them inside India. Whether a particular arrangement is an intermediary at all is still a question of fact.
- Work done in front of the client in India. A service that needs the client's physical presence is supplied where it is performed, so in-person work for a visiting client is not an export.