GST on Video Editing and Similar Digital/Professional Services

 By CA Surekha S Ahuja

As India becomes a global hub for digital, creative, and professional services, professionals supplying video editing, animation, design, software, consulting, and similar services to clients outside India need a precise understanding of GST, export classification, ITC eligibility, domestic advisory charges, and refund mechanisms.

This guidance note integrates legal provisions, CBIC circulars, real-world scenarios, and nuanced advisory for professionals, CAs, and business advisors.

Defining Export of Services under GST

Legal Basis – Section 2(6), IGST Act 2017

A service qualifies as an export only when all five conditions are satisfied:

Condition	Requirement	Analytical Insight
Supplier	Located in India	GST-registered supplier; supply from India
Recipient	Outside India	Must be a distinct legal entity; supply to branch/subsidiary of same entity is not export
Place of Supply	Outside India	Determined under Sec 13(2) IGST; exceptions under Sec 13(3) must be considered
Payment	In convertible foreign currency or RBI-approved INR	Non-compliance converts supply to domestic
Distinct Entities	Supplier and recipient	Ensures separate economic identity; critical for zero-rated supply

Section 13(2) – Default Place of Supply Rule:

“The place of supply of services, except services specified in sub-sections (3) to (13), shall be the location of the recipient of services.”

Exclusions:

• Sec 13(3)(a): Services linked to goods requiring physical presence

• Sec 13(3)(b): Services requiring supplier presence

Circular Reference:

• CBIC Circular 230/24/2024-GST (10.09.2024) confirms that digital and remote professional services exported to foreign clients are zero-rated, even when delivered online.

GST Treatment:

• Zero-rated supply under Sec 16 IGST.

• Full Input Tax Credit (ITC) claimable on inputs and services used for exported services.

• Supplier may either operate under LUT/Bond or pay IGST and claim refund via Form RFD-01.

Critical Compliance Notes:

• Foreign currency receipt is mandatory; proof of inward remittance is essential.

• Recipient must be a distinct legal entity.

• Contracts and invoices should clearly indicate recipient location, currency, and zero-rated supply.

Domestic Advisory/CA Fees Billed to Indian Entities

Scenario: Indian exporter hires a CA or consultant for compliance, structuring, or advisory services.

Analysis:

• Supply is domestic → GST 18% (SAC 9982/9983).

• Refund of GST not allowed.

• ITC may be claimed by the Indian exporter if advisory service is directly used for exported services.

Key Advisory Points:

1. Ensure invoice explicitly mentions GST.

2. Maintain contracts linking advisory work to exported services.

3. Record ITC in ledgers with clear mapping to exported supply.

4. Missing documentation may lead to ITC disallowance on audit.

Differential Table – Export vs Domestic Advisory:

Feature	Exported Service	Domestic Advisory Fee
GST Rate	0%	18%
Refund	Yes (LUT/IGST)	No
ITC	Fully claimable	Claimable if linked to export
Place of Supply	Recipient outside India	India

Platform or Intermediary-Based Supply

Scenario: Services routed via Indian platforms (Fiverr India, Upwork India) or intermediaries.

Analytical Treatment:

• Supplier → Platform (India) → Domestic supply → GST 18%

• Platform → Foreign Client → Export → Zero-rated supply

• ITC of GST paid to domestic supplier is claimable if used for exported service

Key Insights:

• Section 14 IGST (Principal Supply) applies → GST classification follows principal supply rules.

• Proper documentation linking domestic service to exported output is mandatory.

• Multi-layer invoicing requires accurate ITC tracking.

Place of Supply and Classification – Minute Detailing

Scenario	Section	Place of Supply	GST Treatment	Refund / ITC
Video editing / digital service → Foreign client	13(2)	Recipient outside India	Zero-rated	Refund claimable; ITC fully claimable
CA / advisory fees → Indian client	2(6)	India	Domestic 18%	Refund not allowed; ITC claimable if linked to export
Domestic intermediary / platform services	14	India	Domestic 18%	ITC claimable if linked to export
Platform → Foreign client	13(2)	Recipient outside India	Zero-rated	Refund claimable; ITC fully claimable

Professional Insights:

• Export classification hinges on recipient location and distinct legal entity.

• Documentation is key: invoices, contracts, and proof of remittance.

• ITC linkage must be auditable to withstand GST scrutiny.

Process & Documentation – Detailed Steps

1. Invoices:

   • Export: Foreign currency, zero-rated, reference LUT/Bond.

   • Domestic advisory: INR, GST 18%.

2. Contracts:

   • Explicitly identify foreign client, scope, and linkage with domestic advisory.

3. Payment Proof:

   • Foreign inward remittance certificates.

   • Domestic payment proof for CA/advisory fees.

4. LUT / IGST Refund Filing:

   • LUT/Bond for zero-rated supply.

   • Refund claim via Form RFD-01 if IGST is paid.

5. ITC Tracking:

   • Maintain detailed ledgers of GST paid on domestic advisory/input services.

   • Explicit mapping to exported services is mandatory.

Risk Triggers and Compliance Safeguards

• Non-convertible currency → Export classification fails → GST liability arises.

• Recipient not distinct → Reclassified as domestic → Zero-rating denied.

• Misclassification of platform services → Refund denial.

• Missing contracts, invoices, or remittance proof → ITC disallowance.

• Domestic advisory fees without linkage → ITC disallowed.

Professional Advisory:

• Maintain complete documentation, including contracts, invoices, bank remittance, and ITC ledger.

• Verify recipient location, entity status, and currency of receipt.

• Ensure LUT/Bond filing prior to export.

FAQs 

Q1: Are remote video editing or digital services exported?
A: Yes, if all Section 2(6) IGST conditions are met and payment is in foreign currency.

Q2: Can GST on CA/advisory fees billed in India be refunded?
A: No, domestic supply → refund not allowed. ITC may be claimed if linked to exported services.

Q3: Does platform invoicing affect export classification?
A: No, recipient location determines zero-rated treatment (Sec 13(2)).

Q4: Can payment in INR qualify as export?
A: Only if RBI-approved; otherwise, must be convertible foreign currency.

Key Takeaways – Ultimate Analytical Insights

• Exported services → Zero-rated GST; full ITC; foreign currency remittance proof essential.

• Domestic advisory / CA fees → GST 18%; no refund; ITC claimable if linked to exported service.

• Platform/intermediary arrangements → Accurate GST classification and ITC mapping essential.

• Documentation → Contracts, invoices, remittance proof, and ITC ledgers are critical.

• Audit Safeguard → Maintain clear linkage between domestic input and exported service.

Key Differentials / Risk Triggers:

• Currency of payment

• Recipient legal entity

• Place of supply (Sec 13(2)/Sec 14 IGST)

• Documentation & proof of payment

• ITC linkage and audit trail

Conclusion

This guidance note is the ultimate reference for professionals, exporters, CAs, and advisory firms. It provides:

• Law-based classification for exports and domestic advisory

• Detailed ITC and refund eligibility analysis

• Platform and intermediary flows

• Minute compliance steps and risk mitigation

• Audit-ready documentation advisory

It is designed to prevent GST defaults, enable zero-rated exports, and ensure professional compliance with maximum clarity.