You Pay Figma and Vercel in Dollars. GST Says You Owe 18%.

Every Indian freelancer knows the outbound side of GST. You raise an invoice, you charge 18%, or you file an LUT and charge nothing to your US client.

Almost nobody thinks about the inbound side.

You pay for Figma. Vercel. A GitHub seat. An OpenAI or Anthropic subscription. A Notion workspace. Maybe you paid a designer in Poland $400 last month. All in dollars, all charged to your card, all sitting in your expenses folder.

If you are GST-registered, most of those payments created a GST liability. Not for the vendor — for you. And a document you were supposed to issue and almost certainly didn't.

This is the single most common blind spot we see in Indian freelance GST compliance. It usually surfaces during a return scrutiny, two or three years late, with interest attached.

Why a foreign subscription is a taxable supply

Under Section 2(11) of the IGST Act, an import of services is any service where the supplier is outside India, the recipient is in India, and the place of supply is in India.

For most digital services the place of supply is your location — the recipient's. Section 13(2) sets that as the default rule, and Section 13(12) says the same specifically for OIDAR services (software delivered over the internet that couldn't exist without it, which describes almost every SaaS tool you pay for).

So: Figma is outside India. You are in India. Place of supply is India. That is an import of services, and imports are taxable.

The next question is who pays. That's answered by Notification No. 10/2017 – Integrated Tax (Rate), which puts any service supplied by a person in a non-taxable territory to a person in India — other than a "non-taxable online recipient" — under reverse charge. A non-taxable online recipient is an unregistered person. You are registered. So you are not one, and the liability lands on you.

This is why Adobe or Canva might charge Indian GST on a personal account but not on your business account: once you hand over a GSTIN, the supplier steps out of the tax and hands it to you.

The one-line test: is there an Indian GSTIN on the invoice?

Forget the legal analysis for a second. Here's the practical rule you can apply to any receipt in under ten seconds.

Open the invoice. Look for an Indian GSTIN on the supplier's side.

• There is one → the vendor is billing you through an Indian entity, has already charged you CGST/SGST or IGST, and has paid it. Nothing more for you to do. Claim the ITC normally. This is common for large platforms that have set up Indian billing entities for advertising and cloud services.
• There isn't one → the vendor is billing you from overseas with no Indian tax on the invoice. Reverse charge applies. You owe the tax.

Vendors change their billing entities without announcing it, and the entity can differ by product line within the same company. Don't rely on what was true last year, and don't rely on a list in a blog post — including this one. Check the actual invoice.

What you actually owe

Rate: the same rate that would apply if the service were supplied in India. For software, design tools, cloud hosting, consulting and almost everything a freelancer buys, that's 18% IGST. Imports are treated as inter-state supplies, so it's always IGST — never CGST + SGST.

Value: what you paid, converted to rupees. If your card statement says $20, the taxable value is the rupee equivalent and the tax is 18% on top of it — roughly ₹1,750 value and ₹315 IGST on a $20 subscription at ₹87.5.

Payment method: this is the part that stings. RCM liability must be discharged in cash. You cannot set it off against input tax credit sitting in your electronic credit ledger. Money leaves your bank.

You then claim the same amount back as ITC (see below), so for most people the net economic cost is zero — but the cash and the paperwork are real.

The document nobody issues: the self-invoice

Your foreign vendor cannot issue you a GST-compliant tax invoice. They have no GSTIN and no obligation under Indian law.

So Section 31(3)(f) of the CGST Act makes you do it. A registered person liable to pay tax under reverse charge on a supply from an unregistered supplier must issue an invoice to himself for that supply.

That's the self-invoice. It's a real document, with a real serial number, that has to sit in your records.

A self-invoice broadly carries the same particulars as a normal tax invoice, with you appearing on both sides:

There is also a payment voucher under Section 31(3)(g), which you issue at the time of making payment to the supplier. Many small businesses fold this into their records alongside the self-invoice; ask your CA how they want it kept.

Practical note: one self-invoice per vendor per month is usually workable and is a lot less painful than one per transaction. Confirm the approach with your CA before you standardise on it.

Rule 47A: the 30-day clock

This is the part that changed, and the part most people missed.

Until late 2024 there was no explicit deadline for issuing a self-invoice, so it was routinely treated as a clean-up task at return-filing time — or at year end, or never.

The Finance (No. 2) Act, 2024 amended Section 31(3)(f) to let the government prescribe a deadline, and Notification No. 20/2024 – Central Tax (dated 8 October 2024) inserted Rule 47A, effective 1 November 2024:

A self-invoice under Section 31(3)(f) must be issued within 30 days from the date of receipt of the supply of goods or services.

Two consequences worth internalising:

1. 1.The self-invoice date now drives your time of supply. For services received under reverse charge from an unregistered supplier, the time of supply is linked to the date the recipient issues the invoice. Issue it late and your tax was due earlier than you paid it — which means interest.
2. 2.Late issuance can attract penalty under Section 122, independently of the interest.

The compliance habit this implies is simple: at the end of every month, run through your card statement and PayPal/Wise history, pull out every foreign-billed service, and raise the self-invoices. Thirty days is not a lot of runway if you only look at this quarterly.

Which exchange rate to use

Rule 34(2) of the CGST Rules governs this for services: the rate of exchange is the one determined per generally accepted accounting principles for the date of the time of supply.

In practice that points to AS-11 — commonly the RBI reference rate on the relevant date, or another rate consistent with an accounting policy you apply consistently and disclose.

The important word is consistently. Pick one basis — RBI reference rate on the time-of-supply date is the cleanest and most defensible — and use it for every self-invoice, every month. Don't use your card's conversion rate for one and the RBI rate for another because it happened to be handy.

Note this is the same rule that governs the rupee value on your outward export invoices, so if you already have a policy for those, apply it here too.

Where it goes in your returns

Two entries, same return:

• GSTR-3B, Table 3.1(d) — "Inward supplies liable to reverse charge." Report the taxable value and the IGST. This liability is paid in cash.
• GSTR-3B, Table 4(A)(3) — "Inward supplies liable to reverse charge (other than 1 & 2 above)." Claim the ITC here, if you're eligible.

Nothing goes in GSTR-1. GSTR-1 is your outward supplies; this is an inward supply.

The ITC catch, and why it's worse if you export

For a freelancer billing Indian clients with GST, RCM is a wash. You pay ₹315 in cash, you claim ₹315 as credit, it offsets your output liability next month. Annoying, not expensive.

If you export under an LUT, it isn't a wash. Your outward supplies are zero-rated, so you have little or no output tax to absorb the credit. That IGST goes into your electronic credit ledger and accumulates. To get it back you have to file a refund of unutilised ITC on zero-rated supplies — a separate application, with its own documentation and timelines.

Which is exactly why this matters more for the export-heavy freelancer than for anyone else: you're the person paying the most in foreign SaaS, and the person for whom the credit doesn't automatically wash out.

There's one piece of good news here. Circular No. 211/5/2024-GST (26 June 2024) clarified that where you're required to self-invoice under Section 31(3)(f), the relevant financial year for the Section 16(4) ITC time limit is the year in which you issued the invoice — not the year you received the supply. So if you discover three years of missed RCM tomorrow, raise the self-invoices, pay the tax with interest, and the credit isn't automatically dead. Interest and possible penalty still apply, and this is precisely the situation to walk into a CA's office with rather than fix yourself.

What if you're not GST-registered?

Here the answer splits, and the split is genuinely important.

For OIDAR services — Figma, Canva, a Notion seat, a cloud subscription — an unregistered person is a "non-taxable online recipient." Reverse charge does not apply to you. Instead the obligation flips to the foreign supplier, who is required to register in India and charge you IGST directly. That's why the invoice on a personal Canva account often shows Indian tax. Not your problem.

For non-OIDAR imported services — you hire a developer in Argentina, a lawyer in Singapore, a consultant in the UK to do actual bespoke work for you — this is where it gets uncomfortable. Section 24(iii) of the CGST Act requires compulsory registration, regardless of turnover, for any person liable to pay tax under reverse charge. Read literally, importing a single non-OIDAR service can pull an unregistered freelancer into mandatory GST registration.

The line between OIDAR and non-OIDAR is not always obvious — a self-serve software subscription is clearly OIDAR, a human doing custom work over email is clearly not, and there's a lot of ground in between. If you're unregistered and paying foreign contractors, this is a real question to put to a CA rather than a thing to reason your way through from a blog post.

The five-minute monthly habit

1. 1.Pull your card statement, PayPal and Wise history for the month.
2. 2.Flag every payment to a foreign vendor.
3. 3.For each, open the invoice and check for an Indian GSTIN. If present, skip it.
4. 4.For the rest, raise a self-invoice — one per vendor, dated within 30 days of receipt, with SAC and IGST at 18%.
5. 5.Report in GSTR-3B Table 3.1(d), claim in Table 4(A)(3).

That's it. It's fifteen minutes a month done routinely and a very bad quarter done retrospectively.

What this looks like day to day

The inbound half of GST is entirely a documentation problem. The tax usually nets to zero. What costs you is the missing paper trail — a self-invoice series that was never opened, a 30-day clock nobody was watching, and a rupee conversion done three different ways across the same year.

Mavoin handles the outbound half: GST invoices for Indian clients, LUT-ready export invoices for foreign ones, multi-currency, with the FX and remittance side reconciled. ₹199/month, thirty-day trial, no card. If the outbound half of your invoicing is currently a spreadsheet and a Word template, that part we can fix — the reverse-charge paperwork still belongs in your monthly routine and your CA's inbox.

Last reviewed: July 2026. This article is general information on Indian GST law as it stands in July 2026, not tax advice. Reverse charge on imported services involves classification questions — particularly the OIDAR boundary and registration triggers under Section 24(iii) — where the right answer depends on your specific facts. Please confirm your position with a qualified chartered accountant.