How Indian Freelancers Should Invoice Foreign Clients in USD

Half of India's freelancers bill someone abroad — a US startup, a UK agency, a German product team. The work is the easy part. The invoice raises real questions: which currency, do I charge GST, how do my books stay in INR, and what will my CA ask for at filing time? Here is the practical version.

Not legal advice. Cross-border tax has genuine complexity — treat this as a map, and confirm your specifics with a CA.

First: is this an "export of service"?

For most freelancers billing a foreign client, the answer is yes. Under GST, a supply qualifies as export of services when, broadly:

• the supplier (you) is in India,
• the recipient is outside India,
• the place of supply is outside India,
• payment is received in convertible foreign exchange (or INR where RBI permits), and
• you and the recipient are not merely branches of the same entity.

Export of services is treated as a zero-rated supply. That is the key that unlocks not charging tax — but only if you handle it correctly.

LUT vs IGST: the fork in the road

Zero-rated does not mean "ignore GST." You have two legitimate routes:

1. 1.File a Letter of Undertaking (LUT) — then you can export without charging IGST. The LUT is a once-a-year filing on the GST portal. This is what most freelancers want: a clean invoice with no tax line.
2. 2.No LUT? Then you charge IGST on the invoice and claim it back as a refund later. More paperwork, more cash tied up.

So the very first thing to sort out is your LUT. With it filed, your USD invoice to a US client shows no GST and a note that it is an export under LUT.

Which currency — and how INR books still work

Bill in the client's currency. A US client expects USD; a UK client, GBP; an EU client, EUR. But your books, your GST returns, and your income tax are all in INR.

The reconciliation rule: record the INR equivalent using the exchange rate on the date of the invoice (or the rate rules your accountant follows consistently). So a $2,000 invoice becomes both:

• $2,000 — the amount your client pays, and
• ₹1,66,000 (at, say, ₹83/USD) — the amount that lands in your books.

When the payment actually arrives, the realised rate may differ slightly. That difference is a foreign exchange gain or loss — normal, and your CA handles it.

Worked example

You invoice a US client $2,000 for consulting, LUT filed, on a day the rate is ₹83.20:

No IGST line, a clear "export of services under LUT" note, your bank details for a foreign wire, and the INR equivalent recorded for your books.

What your bank and CA will want: FIRC / FIRA

When foreign payment lands, your bank issues a FIRC (Foreign Inward Remittance Certificate) or an electronic FIRA / e-BRC. This is your proof that payment came in convertible foreign exchange — which is what keeps the export zero-rating valid. Keep every one; your CA needs them to close out the export treatment.

A quick checklist before you send

1. 1.LUT filed for the year? (If not, you must charge IGST.)
2. 2.Invoice in the client's currency, with your bank/SWIFT details.
3. 3."Export of services under LUT — zero-rated" noted on the invoice.
4. 4.INR equivalent recorded at the invoice-date rate.
5. 5.FIRC/FIRA collected when payment arrives.

The tooling problem

Spreadsheets do not do this well. You end up hand-converting rates, forgetting the LUT note, and losing track of which USD invoice maps to which INR figure at filing time.

Mavoin is built for exactly this: raise the invoice in USD, EUR, or GBP, capture the FX rate on the invoice date automatically, and keep the INR equivalent in your books — so foreign clients see a clean bill and your CA sees clean INR numbers. Start a 30-day trial and send your next export invoice properly.