GST Invoice for Exports & Zero-Rated Supplies: Complete Guide

What Are Zero-Rated Supplies?

Under Section 16 of the IGST Act, zero-rated supplies include:

• Export of goods — physical goods shipped outside India
• Export of services — services supplied to recipients outside India (meeting 5 conditions)
• Supplies to SEZ units/developers — treated equivalent to exports

Zero-rated means no GST is collected from the buyer. Unlike exempt supplies, zero-rated exporters can still claim full Input Tax Credit on inputs used for making those supplies.

Two Routes for Zero-Rated Exports

Route 1: With LUT (Recommended)

• File Form RFD-11 (LUT) on the GST portal at the beginning of each financial year
• Issue export invoice with 0% GST and declaration: "SUPPLY MEANT FOR EXPORT UNDER LUT WITHOUT PAYMENT OF IGST"
• Claim refund of accumulated ITC (Input Tax Credit on inputs/services used for exports)
• Best for: Service exporters, businesses with high input costs wanting to avoid cash flow blockage

Route 2: Without LUT (IGST Route)

• Charge 18% IGST on the export invoice (or applicable rate)
• Pay the IGST to the government
• Claim refund of IGST paid on export after the shipping bill/invoice is linked on ICEGATE
• Declaration on invoice: "SUPPLY MEANT FOR EXPORT WITH PAYMENT OF IGST"
• Best for: Small or occasional exporters where the refund is straightforward

Who Can File an LUT?

Any GST-registered person making zero-rated supplies can file an LUT, except those:

• Prosecuted for tax evasion exceeding ₹250 lakh in the preceding 5 years

LUT is valid for the entire financial year and must be filed on or before making the first export of that year. Renewal is required at the start of each financial year.

Mandatory Fields on an Export Invoice

All standard tax invoice fields plus the following export-specific requirements:

• Invoice declaration: "SUPPLY MEANT FOR EXPORT UNDER LUT WITHOUT PAYMENT OF IGST" or "WITH PAYMENT OF IGST"
• Buyer's country
• Currency of payment (USD, EUR, GBP, etc.)
• Amount in foreign currency
• Equivalent INR value (at RBI rate on date of supply)
• Port of export (for goods)
• Shipping bill/airway bill details (for goods — added after shipment)
• LUT number and date (if applicable)
• GSTIN of supplier (always mandatory)

Export of Goods — Process

1. File LUT on GST portal (if using LUT route)
2. Raise export invoice with all mandatory fields + export declaration
3. Ship goods — file shipping bill with ICEGATE (India's customs portal)
4. Report in GSTR-1 — Table 6A (exports without payment) or Table 6B (exports with IGST)
5. Claim refund — IGST refund via ICEGATE-GSTN linkage; ITC refund via RFD-01 on GST portal

Export of Services — Conditions

For a service to qualify as "export of services" (and thus be zero-rated), all five conditions must be met:

1. The supplier of service is in India
2. The recipient of service is outside India
3. The place of supply of service is outside India (under IGST Act provisions)
4. The payment for such service has been received by the supplier in convertible foreign exchange or in Indian Rupees wherever permitted by RBI
5. The supplier and recipient of the service are not merely two establishments of the same person

SEZ Supplies

Supplies to Special Economic Zone (SEZ) units or SEZ developers are treated as zero-rated supplies under Section 16 of the IGST Act — equivalent to exports.

• Obtain a letter from the SEZ unit confirming they are an authorized operations zone
• Invoice declaration: "SUPPLY TO SEZ UNIT/DEVELOPER WITH/WITHOUT PAYMENT OF IGST"
• File in GSTR-1 Table 6B (with IGST) or Table 6A (with LUT)
• SEZ buyer does not pay any tax at the border

Invoicing in Foreign Currency

• You may invoice in USD, EUR, GBP, AED, or any RBI-permitted foreign currency
• The GST value (if applicable) and GSTR-1 reporting must be in INR
• Use the RBI reference rate on the date of supply to convert
• If RBI rate isn't available for that currency, use the rate notified by CBEC
• Stamp "FOREIGN CURRENCY INVOICE" on the document and show both amounts

Refund Process for Exporters

IGST Refund (Route 2 — paid IGST):

1. File shipping bill with export invoice details
2. ICEGATE automatically links shipping bill to GSTR-1 exports table
3. Refund is auto-processed within 7–10 working days after successful linkage
4. Amount is credited to your registered bank account

ITC Refund (Route 1 — LUT):

1. File Form RFD-01 on the GST portal claiming accumulated ITC refund
2. Attach export invoices, FIRC/BRC from bank (for service exports)
3. Tax officer reviews and issues provisional refund (90% within 7 days)
4. Final order issued within 60 days

Common Mistakes in Export Invoicing

• Not filing LUT before the first export — If you export before LUT filing, IGST becomes payable
• Wrong place of supply — For services, POS must be outside India; use the IGST Act's POS rules for each service type
• No FIRC for service exports — Banks issue FIRC (Foreign Inward Remittance Certificate) for foreign payments; maintain this for ITC refund claims
• Reporting export in wrong GSTR-1 table — Table 6A is for exports without IGST; Table 6B is with IGST; Table 6C is for deemed exports