Exporting services from India
Consultancy & Professional Services Setup in India
An Indian consultancy exporting services can supply them without output tax, provided the paperwork is right.
GCC business setup specialists
Zero rating is available but conditional
Services exported from India can be supplied without charging output tax, which matters enormously for a consultancy serving overseas clients. But it is conditional: the place of supply rules must be satisfied, payment must be received in convertible foreign exchange, and an undertaking must be filed to supply without payment of tax. Businesses that assume export means automatically untaxed, without filing the undertaking, create a liability they did not expect.
- Export zero rating set up properly, including the undertaking
- Withholding on your fees explained so cash flow is planned
- Profession restrictions checked where regulated
Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
Companies successfully established.
What applies
Tax and regulation for a consultancy
Exports and withholding dominate.
| Element | Position |
|---|---|
| Service exports | Can be zero rated subject to conditions. |
| Undertaking for export | Filed to supply without payment of tax. |
| Foreign exchange receipt | Required for export treatment. |
| Withholding on your fees | Indian clients deduct tax at source. |
| Regulated professions | Some are restricted or reserved. |
| Place of supply rules | Determine whether it is an export at all. |
Export conditions, the undertaking requirement, place of supply rules, withholding rates and professional restrictions are set by the authorities and change. Yours are confirmed before you invoice.
How it works
Setting up the practice
Export mechanics before the first invoice.
Establish the client mix
Whether clients are Indian or overseas, since that determines whether output tax applies or export treatment is available.
Set up the mechanics
Registration completed, the export undertaking filed where applicable, and invoicing and foreign exchange receipt arrangements established.
Plan for withholding
Indian client payments arriving net of tax deducted at source, with credit claimed and cash flow planned accordingly.
- What services you provide
- Whether clients are in India or overseas
- Expected split between domestic and export revenue
- How payment will be received
- Whether payment will be in foreign currency
- Whether the profession is regulated
- Professional qualifications held
- Whether you will subcontract work
- Whether staff will be employed
- States where you will operate
- Expected fee income
- Whether related-party services are provided
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Entity incorporation and registrations
- Goods and services tax registration
- Export undertaking filing where applicable
- Invoicing set up for domestic and export supplies
- Guidance on foreign exchange receipt requirements
- Withholding credit tracking
- Profession restriction check
- Accounting and compliance calendar
Not included, quoted separately
- Government fees, paid at cost
- Professional body memberships
- Professional indemnity premiums
- Office rent and staff costs
- Audit and tax audit fees
- Transfer pricing documentation for related-party services
- Tax advice outside India
- Client contract drafting by a lawyer
Verify independently
Official Indian authorities
We file directly with these bodies on your behalf.
Questions
India consultancy setup — FAQs
Can I export services from India without tax?
Service exports can be zero rated, but conditions apply including the place of supply rules, receipt in convertible foreign exchange and filing an undertaking. It is not automatic.
What happens if I do not file the undertaking?
You may be required to charge and pay output tax on supplies you treated as exports, creating an unexpected liability. The filing matters.
Why do my Indian clients pay me less than I invoice?
Because they deduct tax at source on professional fees. You claim credit for it against your own liability, but it affects cash flow.
Are foreign professional firms restricted?
Certain professions carry restrictions on practice by foreign firms. We check your specific profession before you plan around it.
Do related-party services need documentation?
Where you provide services to group companies, transfer pricing documentation requirements can apply. We flag it and co-ordinate specialists.
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