Export of Services to UAE: GST Conditions, LUT, Place of Supply & Documentation

Summary: Indian professionals and businesses supplying services to UAE customers must satisfy every condition for export of services under the IGST Act before treating the supply as zero-rated. A foreign invoice or overseas payment alone does not establish an export; the genuine recipient, applicable place-of-supply rule, contractual substance and payment arrangements must support the position. The article explains the five export conditions, Section 13 place-of-supply rules, special treatment of property and goods-related services, consulting, software, advertising and intermediary services, the 2026 omission of Section 13(8)(b), LUT filing, export invoices, foreign and third-party payments, Rule 96A realisation requirements, GST registration, GSTR-1 and GSTR-3B reporting, refund of unutilised ITC, UAE branches and subsidiaries, documentation and common compliance errors.

Introduction

Indian professionals and businesses increasingly provide consulting, software development, accounting, marketing, design, research and back-office services to customers in the United Arab Emirates.

The commercial arrangement often appears straightforward: the supplier works from India, raises an invoice on a UAE customer and receives payment from abroad. The GST treatment, however, cannot be decided from the foreign billing address alone.

For a service to qualify as an export, every condition prescribed under the Integrated Goods and Services Tax Act, 2017 must be satisfied. The supplier must also determine the correct place of supply, furnish a Letter of Undertaking where required, report the invoice properly and preserve evidence of foreign payment.

A weakness in any one of these areas can turn an apparently zero-rated export into a taxable supply.

Start With the Five Export Conditions

Section 2(6) of the IGST Act treats a supply as an export of services when:

• The supplier of the service is located in India;
• The recipient of the service is located outside India;
• The place of supply is outside India;
• Payment is received in convertible foreign exchange or in Indian rupees where permitted by the Reserve Bank of India; and
• The supplier and recipient are not merely establishments of the same person treated as distinct persons.

All five conditions must be fulfilled.

The Indian supplier should not begin by asking whether the invoice is raised in US dollars or UAE dirhams. The first question is whether the UAE customer is the genuine recipient and whether the applicable place-of-supply rule places the service outside India.

A UAE Invoice Does Not Prove an Export

Consider an Indian consultancy that sends an invoice to a Dubai company. Payment is received from a UAE bank account.

On the surface, the transaction appears to be an export. A closer review may show that the work was requested by the Dubai company’s Indian subsidiary, delivered to its Indian management and used entirely for its Indian operations.

The Dubai entity may merely be making the payment.

GST authorities can examine the contractual and commercial substance of the arrangement. The recipient is ordinarily the person liable to pay the consideration, but the agreement, conduct of the parties and actual use of the service should be consistent.

Relevant questions include:

• Who negotiated and signed the agreement?
• Who issued the purchase order?
• Who provides instructions to the Indian supplier?
• Who receives and approves the deliverables?
• Which entity is entitled to enforce the contract?
• Who is legally required to make payment?
• Does an Indian entity receive a separate or direct benefit?

If the documentation points in different directions, the export position becomes difficult to defend.

Determining the Place of Supply

When either the supplier or recipient is outside India, the place of supply is generally determined under Section 13 of the IGST Act.

Section 13(2) provides the default rule. Unless a specific provision applies, the place of supply is the location of the recipient. Where the recipient’s location is not available in the ordinary course of business, the place of supply becomes the supplier’s location.

For many business services supplied to a genuine UAE customer, the recipient-location rule can place the supply outside India.

These may include:

• Management consultancy;
• Accounting and bookkeeping support;
• Software development;
• Website development;
• Graphic design;
• Business research;
• Data analysis;
• Remote administrative support;
• Content creation;
• Digital marketing;
• Engineering design;
• Commercial advisory; and
• Information-technology support.

The place where the Indian supplier performs the work is not always decisive. An Indian software developer can work from Bengaluru while the place of supply is the UAE under the default rule.

However, the default rule applies only after confirming that no special provision governs the service.

Services That Require Additional Examination

Certain services follow specific place-of-supply rules because they are connected with property, physical performance, goods, events or other identified factors.

Extra care is required for:

• Services relating directly to immovable property;
• Services involving goods physically made available to the supplier;
• Services requiring the physical presence of an individual;
• Admission to or organisation of events;
• Banking services supplied to account holders;
• Short-term hiring of means of transport;
• Passenger-transportation services;
• Services supplied on board a conveyance; and
• Online information and database-access or retrieval services.

The description used on the invoice cannot override the actual activity.

Calling a property-valuation service “consulting” does not make the default recipient-location rule applicable if the service directly concerns identified property situated in India.

Services Connected With Indian Property

Suppose a UAE investor engages an Indian firm to value a commercial building in Mumbai.

The customer is located in the UAE and may pay the fee in foreign currency. Nevertheless, the service is directly connected with immovable property in India. The place of supply may therefore be India, preventing the transaction from qualifying as an export.

Similar concerns may arise for:

• Architectural services relating to Indian property;
• Property-management services;
• Real-estate brokerage;
• Construction supervision;
• Interior design for identified premises;
• Hotel accommodation; and
• Services granting a right to use Indian immovable property.

A general market study regarding India’s real-estate industry may receive different treatment because it is not necessarily connected with a specific property.

The agreement should clearly identify whether the supplier is providing general advisory work or a service directly linked to particular premises.

Services Involving Physical Goods

A special rule can apply where the UAE customer makes goods physically available to the Indian supplier for providing the service.

Examples may include:

• Testing machinery sent to India;
• Repairing equipment;
• Inspecting samples;
• Treating or processing goods; and
• Performing technical work on identified physical items.

The location where the service is actually performed may become relevant.

The rule should not be applied merely because the Indian supplier uses its own laptop, server or equipment. The focus is generally on goods made physically available by the recipient for the service.

Remote analysis of drawings, reports or digital information should also be distinguished from physical work on goods.

Consulting and Advisory Services

An Indian consultant providing commercial or management advice directly to a Dubai company will commonly examine the default rule under Section 13(2).

A strong export position would ordinarily involve:

• A written agreement with the UAE company;
• A defined UAE or international business purpose;
• Instructions received from UAE management;
• Deliverables addressed to the UAE customer;
• No separate Indian beneficiary;
• Payment obligation resting with the UAE company;
• Receipt of payment through a permitted banking channel; and
• Proper LUT and GST reporting.

The consultant should avoid generic invoices such as “professional charges.”

A clearer description might identify the actual engagement, such as “UAE market-entry advisory services for the period April to June 2026.” The description should remain consistent with the agreement and work performed.

Software and Technology Services

Software development and technology services supplied to UAE companies frequently qualify as exports, but supporting evidence remains important.

The Indian supplier should preserve:

• The master service agreement;
• Statement of work;
• Technical specifications;
• Project milestones;
• Development and deployment records;
• Customer communications;
• User-acceptance confirmation;
• Support tickets;
• Timesheets; and
• Evidence of delivery.

Where the supplier develops or maintains software on its own account, the service should not be treated as an agency activity merely because the UAE customer subsequently provides the technology to its users.

CBIC has similarly clarified that an Indian data-hosting provider supplying comprehensive hosting services to an overseas cloud-computing business on a principal-to-principal basis is not automatically an intermediary. In the circumstances covered by Circular No. 232/26/2024-GST, the default place-of-supply rule can apply.

Advertising and Marketing Services

Indian advertising and digital-marketing businesses frequently work for UAE companies seeking customers in India, the Gulf or international markets.

Where the Indian agency develops and supplies a complete advertising service on its own account, the UAE customer may be the recipient and the default place-of-supply rule may apply.

The position should be distinguished from an arrangement where the Indian business merely purchases advertising space or arranges another person’s supply as an agent of the UAE customer.

CBIC Circular No. 230/24/2024-GST recognises that an Indian advertising company supplying a complete advertising service to a foreign client on a principal-to-principal basis is not necessarily an intermediary. Subject to the remaining conditions, the service can qualify as an export.

Contracts should make clear whether the Indian company is:

• Supplying its own advertising service;
• Buying and reselling media as part of its service;
• Acting as an agent for the UAE customer; or
• Merely earning commission for arranging media space.

Intermediary Services After the 2026 Amendment

The treatment of intermediary services has been a major source of GST disputes.

An intermediary broadly refers to a broker, agent or other person who arranges or facilitates a main supply between two or more persons without supplying the main goods or services on the intermediary’s own account.

Typical arrangements may include:

• Introducing buyers to a UAE seller;
• Arranging purchases for a UAE principal;
• Coordinating transactions between a UAE company and Indian customers;
• Earning commission when a third-party sale is completed; and
• Facilitating contracts without assuming responsibility for the main supply.

Before the 2026 amendment, Section 13(8)(b) generally placed the supply of intermediary services at the location of the supplier. An Indian intermediary serving an overseas principal could therefore have an Indian place of supply and fail the export test.

The Finance Act, 2026 omitted Section 13(8)(b). Intermediary services are consequently no longer governed by that special supplier-location rule. Their place of supply is now determined under the remaining applicable provisions, ordinarily the default recipient-location rule in Section 13(2).

The official Finance Bill memorandum confirms that the purpose of the amendment is to bring intermediary services under the default place-of-supply rule.

This change can allow an Indian intermediary serving a genuine UAE recipient to qualify for export treatment, provided that:

• The recipient is located outside India;
• The place of supply is outside India under the applicable provision;
• Payment satisfies the export condition;
• The supplier and recipient are not establishments of the same person; and
• All procedural requirements are fulfilled.

Transactions belonging to periods before the amendment should be examined separately. Businesses should not apply the new treatment retrospectively without analysing the law applicable to the relevant invoice, service period and time of supply.

Own-Account Service or Intermediary?

The difference between an independent service and facilitation depends on what the Indian supplier has undertaken to provide.

An Indian research firm that collects and analyses market data for a UAE client supplies research on its own account.

An Indian agent who introduces a UAE supplier to customers and receives commission when sales are completed facilitates a main supply between two other persons.

The number of parties, contractual responsibilities, method of remuneration and commercial risks are important.

A commission-based fee does not conclusively establish an intermediary relationship. Equally, changing the invoice description from “sales commission” to “consultancy fee” does not convert facilitation into independent consulting.

The agreement and actual conduct must be examined together.

Zero-Rated Does Not Mean No Compliance

An export of services is a zero-rated supply under Section 16 of the IGST Act.

Zero rating generally allows a registered exporter to supply services without payment of IGST under a Letter of Undertaking and claim a refund of eligible unutilised input tax credit.

It should not be confused with an exempt supply.

The distinction matters because input tax credit attributable to exempt supplies is generally restricted, whereas eligible credit connected with zero-rated exports may be retained or refunded, subject to the statutory conditions.

A registered exporter must report the export in GST returns even where no IGST is payable on the invoice.

Filing a Letter of Undertaking

A registered supplier wishing to export services without paying IGST generally furnishes a Letter of Undertaking in Form GST RFD-11.

The LUT should be filed before making the relevant zero-rated supplies.

It can be furnished electronically through the GST Portal using the following path:

Services > User Services > Furnish Letter of Undertaking

An LUT ordinarily applies for the relevant financial year. A fresh LUT should be filed for each subsequent financial year in which the taxpayer intends to make zero-rated supplies without payment of IGST.

The GST Portal confirms that registered taxpayers exporting services without payment of integrated tax must furnish Form GST RFD-11 before effecting the supply.

Filing an LUT is a procedural facility. It does not convert an otherwise domestic service into an export.

Export Invoice Requirements

An export-service invoice should contain the applicable particulars prescribed under the GST rules.

These commonly include:

• Supplier’s name, address and GSTIN;
• Consecutive invoice number;
• Date of issue;
• UAE customer’s name and address;
• Description of the service;
• SAC, where applicable;
• Taxable value;
• Currency;
• Place of supply;
• Applicable LUT endorsement;
• Payment terms; and
• Signature or digital authentication.

For exports made without payment of IGST under LUT, the invoice should contain the prescribed endorsement indicating that the supply is meant for export under bond or LUT without payment of integrated tax.

The invoice should identify the UAE customer accurately. Using only a trade name without the legal entity’s registered name can create difficulty during payment reconciliation or refund verification.

Receiving Payment From the UAE

Export status generally requires consideration to be received in convertible foreign exchange or in Indian rupees where receipt in rupees is permitted by the Reserve Bank of India.

The supplier should preserve an invoice-wise banking trail.

Useful records include:

• Bank credit advice;
• Foreign Inward Remittance Certificate, where available;
• Bank Realisation Certificate or electronic BRC, where applicable;
• SWIFT details;
• Customer ledger;
• Exchange-rate workings; and
• Invoice-wise payment reconciliation.

Receiving payment in Indian rupees does not automatically disqualify the transaction if the receipt is permitted under the RBI framework. The supplier should retain clear evidence showing why the rupee receipt is permitted.

Third-Party Payments

A payment may occasionally be received from the UAE customer’s parent company, group treasury centre or another authorised person.

Such arrangements require documentation because the payer’s name will not match the invoice recipient.

The exporter should retain:

• A contractual clause permitting third-party payment;
• Written instructions from the UAE customer;
• Confirmation identifying the invoices being settled;
• Banking evidence;
• Group-relationship documents, where relevant; and
• Evidence that the UAE customer remains liable for the consideration.

An unexplained payment from an Indian account can create questions regarding both the recipient and the export-payment condition.

One-Year Realisation Requirement Under LUT

Rule 96A of the CGST Rules addresses the realisation of payment for services exported without IGST under LUT.

Payment should generally be received within one year from the date of the export invoice or within an extended period allowed by the Commissioner.

If the consideration is not received within the permitted period, the exporter may become liable to pay the applicable tax and interest.

Every service exporter should maintain a receivables tracker recording:

• Invoice number;
• Invoice date;
• Currency;
• Invoice value;
• Amount received;
• Receipt date;
• Outstanding balance;
• BRC or FIRC status;
• One-year completion date; and
• Details of any extension requested.

The GST treatment of an overdue export invoice should not be left until the annual accounts are prepared.

GST Registration for Exporters

Export of services is an inter-State supply. However, an exemption from compulsory registration is available to persons making inter-State taxable supplies of services where aggregate turnover remains within the applicable registration threshold.

The general threshold is ordinarily ₹20 lakh, subject to the lower threshold applicable in specified states and other compulsory-registration provisions.

Aggregate turnover is computed on an all-India PAN basis and can include taxable supplies, exempt supplies, exports and inter-State supplies, subject to the statutory definition.

A freelancer below the threshold does not necessarily require registration merely because services are supplied to a UAE customer.

Voluntary registration may still be considered where the exporter wants to:

• Claim input tax credit;
• Apply for refunds;
• Issue GST-compliant export invoices;
• Build a formal export record; or
• Meet the customer’s onboarding requirements.

Voluntary registration also brings continuing obligations such as return filing, reconciliation and record maintenance.

Reporting in GSTR-1 and GSTR-3B

A registered exporter should disclose export invoices in the applicable export table of Form GSTR-1.

The turnover should also be reported correctly in Form GSTR-3B as a zero-rated outward supply.

The taxpayer should reconcile:

• Export invoice register;
• Books of account;
• GSTR-1;
• GSTR-3B;
• LUT details;
• Foreign-remittance records;
• Debit and credit notes; and
• Refund applications.

Common reporting errors include:

• Selecting export with payment of tax instead of export without payment;
• Entering an incorrect invoice value;
• Reporting the wrong place of supply;
• Omitting export invoices;
• Failing to amend cancelled or revised invoices; and
• Claiming a refund on values not reconciled with the returns.

Refund of Input Tax Credit

A registered exporter supplying services under LUT may accumulate input tax credit because no output IGST is paid on the zero-rated invoices.

Subject to the applicable conditions, eligible unutilised credit may be claimed through Form GST RFD-01.

The GST Portal permits refund applications for multiple tax periods to be combined into one application.

The refund claim may require:

• Export-invoice statement;
• GSTR-1 and GSTR-3B details;
• LUT acknowledgement;
• BRCs or FIRCs;
• Input-tax-credit ledger;
• Refund computation;
• Bank-account details;
• Agreements and purchase orders;
• Declarations and undertakings; and
• Evidence establishing export eligibility.

Refund eligibility should be calculated independently rather than treating the entire electronic credit-ledger balance as refundable.

Blocked, ineligible or unrelated credits must be excluded.

Indian Head Office Supplying Its UAE Branch

Services supplied by an Indian head office to its own UAE branch require special attention.

The Indian office and UAE branch are establishments of the same legal person. The export definition excludes a transaction where the supplier and recipient are merely establishments of the same person treated as distinct persons under the IGST Act.

The supply may therefore fail to qualify as an export even if it is recorded through an inter-branch invoice.

The result can differ where the UAE entity is a separately incorporated subsidiary. A subsidiary is ordinarily a separate legal person, although related-party valuation and the actual recipient must still be examined.

Businesses should not use “UAE office,” “UAE branch” and “UAE subsidiary” interchangeably.

Example: Indian Accountant Serving a Dubai Company

An Indian accounting firm signs an agreement with a Dubai trading company.

The Indian firm:

• Maintains the Dubai company’s management accounts;
• Receives records through the UAE finance team;
• Sends monthly reports to Dubai management;
• Has no Indian beneficiary;
• Issues invoices in UAE dirhams;
• Receives payment from the customer’s UAE bank account; and
• Supplies the services under a valid LUT.

If no specific place-of-supply rule applies, the location of the UAE recipient may determine the place of supply. The service can qualify as a zero-rated export when the remaining conditions are met.

Now assume the same Dubai company asks the accountant to maintain the books of its Indian subsidiary. The reports are used by the Indian subsidiary, but payment is made from Dubai.

The supplier should not treat the service as an export merely because the invoice is paid by a foreign entity. The identity of the actual recipient and beneficiary requires separate examination.

Example: Indian Agent Finding Customers for a UAE Supplier

An Indian business identifies buyers for a UAE manufacturer and receives a commission for every completed sale.

The Indian business does not purchase or sell the products on its own account. Its function is to introduce customers and assist in completing contracts between the UAE manufacturer and buyers.

The arrangement may constitute an intermediary service.

For supplies governed by the law following the 2026 omission of Section 13(8)(b), the place of supply will no longer be fixed in India merely because the intermediary is located in India. The default recipient-location rule may place the supply in the UAE.

The service can qualify as an export if all the other conditions are satisfied.

Earlier transactions must be examined according to the law applicable to their relevant period.

Essential Documents

An Indian supplier should build the export file while performing the engagement rather than after receiving a GST notice.

The file should contain:

• Customer agreement;
• Purchase order;
• UAE customer’s incorporation or trade-licence details;
• Scope of work;
• Email instructions;
• Evidence of deliverables;
• Customer acceptance;
• Export invoices;
• LUT acknowledgement;
• Bank statements;
• BRCs or FIRCs;
• GSTR-1 and GSTR-3B reconciliation;
• Refund calculations;
• Payment follow-up records; and
• A written place-of-supply analysis for material or unusual transactions.

For related-party engagements, the supplier should also maintain valuation and transfer-pricing support where applicable.

Frequent Errors to Avoid

Exporters commonly face GST disputes because they:

• Treat every UAE invoice as an export;
• Fail to verify the genuine recipient;
• Ignore special place-of-supply rules;
• Use a UAE entity merely as the payer;
• File the LUT after commencing exports;
• Use an incorrect invoice endorsement;
• Receive payment through an unexplained third party;
• Fail to collect bank-realisation evidence;
• Ignore the one-year payment condition;
• Report export turnover incorrectly in GST returns;
• Treat a UAE branch as a separate foreign customer;
• Apply the 2026 intermediary amendment to earlier supplies;
• Describe an agency arrangement as consultancy without factual support;
• Claim refunds without reconciling invoices and returns; or
• Keep no evidence showing what was delivered to the UAE customer.

Conclusion

Exporting services to the UAE can provide a genuine zero-rated GST opportunity for Indian consultants, technology businesses, accountants, marketing agencies and other service providers.

The benefit, however, depends on substance and documentation.

A valid export requires more than a foreign invoice. The UAE customer must be the genuine recipient, the place of supply must be outside India, payment must satisfy the prescribed condition and the parties must not merely be establishments of the same person.

The 2026 intermediary amendment has improved the position for Indian agents and facilitators serving foreign principals. Even so, each transaction must be tested against the law applicable to its period and its actual commercial arrangement.

The best time to examine GST is before signing the UAE contract. When the agreement, invoice, LUT, payment trail and GST returns all support the same conclusion, the export position becomes significantly easier to defend.

Official References

• Central Board of Indirect Taxes and Customs — Integrated Goods and Services Tax Act, 2017.
• Ministry of Finance, Government of India — Finance Act, 2026 GST Amendment Explanation.
• CBIC Circular No. 230/24/2024-GST — Place of Supply for Advertising Services.
• CBIC Circular No. 232/26/2024-GST — Data Hosting and Export of Services.
• GST Portal — Letter of Undertaking for Export of Services.

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Disclaimer: This article is intended solely for general educational and informational purposes. It does not constitute legal, GST, FEMA or professional advice. The tax treatment of a cross-border service depends on its contractual terms, recipient, place of supply, payment arrangements and the law applicable to the relevant period. Readers should verify current legislation, notifications, circulars and procedures and obtain professional advice before treating a supply as an export or claiming a GST refund.