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Published on 4 April 2025

GST Registration Requirements for Service Exporters in India Explained

Understanding GST Registration for Service Exporters in India

GST registration in India is essential for suppliers whose aggregate turnover exceeds the ₹20 lakh or ₹40 lakh threshold, as per Section 22 of the CGST Act. However, Section 23(1) provides exemptions for individuals engaged solely in supplying goods or services that are non-taxable or entirely exempt. Additionally, Section 24 mandates compulsory registration for those making inter-state taxable supplies.

Export of services is classified as inter-state supply under Section 2(6) of the IGST Act. However, Section 16 defines it as a zero-rated supply, indicating that it is treated as exempt. According to Section 16(2), input tax credit can be claimed even for exempt supplies, while Section 24 only pertains to taxable supplies. Therefore, individuals whose operations exclusively involve the export of services are not required to register for GST, regardless of turnover levels.

Relevant Provisions of GST Law

Section 22: Persons Liable for Registration

  1. Liability to Register: Any supplier must register under the Act in the relevant State or Union territory if their aggregate turnover exceeds ₹20 lakh in a financial year.
    • The Government can, upon a State's request and Council recommendations, raise this limit to ₹40 lakh for suppliers exclusively dealing in goods under specific conditions.

Section 23: Persons Not Liable for Registration

  1. Exemptions: The following individuals are not required to register:
    • (a) Those only supplying goods or services that are non-taxable or completely exempt under this Act or the IGST Act.
    • (b) Agriculturists with respect to the supplies made from land cultivation.
  2. Additionally, the Government may exempt other categories from registration based on recommendations from the Council.

Section 24: Compulsory Registration in Certain Cases

  • Certain individuals, including those making inter-state taxable supplies, must register under the Act, irrespective of Section 22.

Section 2(6) of the IGST Act

  • Defines "export of services" as the provision of services when:
    1. The service supplier is located in India.
    2. The service recipient is located outside India.
    3. The service's place of supply is outside India.
    4. Payment has been made in convertible foreign exchange (or Indian rupees when permitted by the Reserve Bank of India).
    5. The supplier and recipient are not merely distinct establishments.

Section 16 of the IGST Act: Zero-Rated Supply

  1. Defines zero-rated supply to include:
    • (a) Export of goods or services.
    • (b) Supplies to Special Economic Zone (SEZ) developers or units.
  2. Section 16(2) allows for input tax credit on zero-rated supplies, even though they are considered exempt.

Section 7 of the IGST Act: Inter-State Supply

  • Clarifies that a supply of goods or services where the supplier is in India and the place of supply is outside India counts as inter-state supply.

Analysis

  1. Registration Liability: Section 22 outlines registration for suppliers exceeding the specified turnover. Section 24 mandates registration for specific individuals while overriding certain provisions of Section 22.
  2. Exempt Supply Clause: Section 23(1) states that individuals engaging exclusively in non-taxable or exempt supplies are not mandated to register.
  3. Inter-State Taxable Supply Requirement: Section 24(i) specifies that individuals making inter-state taxable supplies must register, clarifying that obligatory registration applies only when the inter-state supply is taxable under GST.

This article addresses whether exporters of services need to register under GST law in India. The extracted relevant provisions should assist readers in understanding this requirement.

The phrase “that are not liable to tax” in Section 23(1) indicates that if the supply is exempt under the CGST Act, the supplier is not required to register. Conversely, Section 24(i) explicitly requires registration only for those involved in inter-state taxable supplies.

Conclusion

In summary, a comprehensive evaluation of Sections 16(2), 23(1), and 24(1) of the CGST Act indicates that individuals exclusively engaged in the export of services are exempt from GST registration, regardless of their monetary turnover.

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