How to Invoice Overseas Clients From India — GST, FEMA and Payment Compliance

Invoicing a foreign client is more than swapping the currency on your usual template. The invoice has to satisfy GST law, the payment channel has to satisfy FEMA, and the receipt has to reconcile cleanly with your GSTR-1 and ITR. Here is the full operating manual.

1. What must appear on a foreign-currency invoice

• Your legal name, address and GSTIN.
• Client's legal name, address and country.
• Sequential invoice number and date.
• Detailed description of services and SAC code.
• Currency (USD/GBP/EUR) and amount in figures and words.
• "SUPPLY MEANT FOR EXPORT OF SERVICES UNDER LUT WITHOUT PAYMENT OF INTEGRATED TAX" with your LUT ARN.
• Bank account details — beneficiary name, account number, IFSC, AD bank name and SWIFT/BIC code; IBAN where applicable.
• Place of supply line — "Place of Supply: [Country] — Export of Services".

2. Which payment channels work — and how FEMA treats each

• SWIFT wire: Cleanest route. Settles into your AD bank in foreign currency, which converts to INR and issues a FIRC. Best for invoices above USD 1,000.
• Wise (TransferWise): Wise settles through its Indian banking partner; you receive INR with a transaction reference. Wise generates an FIRA-equivalent statement; the partner bank issues consolidated FIRCs on request.
• PayPal: Must be auto-credited via the linked Indian bank; PayPal India provides a monthly FIRC for the rupee amount credited.
• Stripe: Settles via its Indian acquiring partner; provides transaction-level remittance reports usable as FIRC equivalents.
• Payoneer: Credits via its Indian banking partner; provides a Payment Details Report and partner-bank FIRCs.

All five are FEMA-compliant when funds settle via an AD-category bank with a documented purpose code and FIRC trail.

3. Purpose codes — what they are and how to use them

Every inward remittance is tagged with an RBI purpose code that classifies the underlying transaction. Common codes: P0802 (software consultancy / implementation), P0807 (off-site software exports), P1006 (business and management consultancy), P1004 (other professional services). Instruct your AD bank in writing on the correct code at first remittance; an incorrect code can mis-classify your export and trigger FEMA queries.

4. FIRC vs. FIRA

• FIRC (Foreign Inward Remittance Certificate): A formal certificate issued by your AD bank confirming receipt of a specific foreign-currency credit. Used as the primary FEMA and GST evidence.
• FIRA / e-FIRA (Foreign Inward Remittance Advice): The electronic equivalent now issued by most banks for digital remittances. Same evidentiary value, just a different format.
• Retention: 8 years from the end of the relevant FY. Digital copies are acceptable.

5. The FEMA 9-month realisation deadline

Under FEMA, service export proceeds must be realised and repatriated within 9 months from the invoice date. Extensions are possible with prior AD-bank approval (and beyond 12 months, RBI). Delayed realisation without approval is a FEMA contravention and can attract penalty under Section 13 FEMA, 1999.

6. Reconciling foreign income

• GSTR-1 Table 6A: report each export invoice, currency, amount and shipping bill column blank (services have no shipping bill).
• GSTR-3B Table 3.1(b): aggregate zero-rated value for the month.
• ITR Schedule FSI: report foreign-source income head-wise, by country.
• ITR Schedule TR: report taxes paid abroad and DTAA relief claimed under Section 90/90A.

7. USD to INR — which rate?

• For GSTR-1: use the rate notified by CBIC under Section 14 of the Customs Act, applicable on the date of supply (invoice date). Published fortnightly by CBIC.
• For ITR: use the SBI TT buying rate on the last day of the month immediately preceding the month in which income is received (Rule 115, Income Tax Rules).

We help freelancers and solopreneurs build a clean, audit-ready invoicing and remittance system. See our International Invoicing & Remittance Support service page, and our Freelancer Tax Compliance retainer for the ITR side.

Frequently Asked Questions