You landed a client in the US. Another one in the UK. Your invoices are in dollars, your payments come through PayPal or Wise, and for the first time, you're earning in foreign currency.

Then tax season arrives, and you're stuck with questions:
Do you need to report this income? How do you file a tax return with foreign income? What about money sitting in Payoneer, does that count?

If you're an Indian freelancer earning from international clients, this gets confusing fast. Here’s what you actually need to know about tax on foreign income, without the jargon or panic.

Tax on foreign income (for freelancers) — the one core rule

Here’s what matters: if you’re a Resident and Ordinarily Resident (ROR) in India, your global income is taxable in India. That includes payments from foreign clients and international platforms.&nbsp;

The payment route doesn’t change this. Whether money lands in <a href="https://www.skydo.com/blog/paypal-in-india-charges-review-alternatives">PayPal</a>, <a href="https://www.skydo.com/blog/transferwise-india-features-benefits-pros-cons">Wise</a>, <a href="https://www.skydo.com/blog/payoneer-fees-india-guide">Payoneer</a>, Skydo, a USD/EUR account abroad, or directly into your Indian bank account — for most ROR freelancers working from India, this is still tax on foreign income in India.

For the rest of this guide, we’re focusing on ROR freelancers (which covers most people freelancing from India).

What counts as “foreign earned income” for freelancers?

Foreign-earned income isn’t a special category on your tax return. It’s simply the income you earned from clients or platforms outside India.

For tax purposes, this usually falls under Profits and Gains of Business or Profession (PGBP) since freelancing is treated as your business.

One crucial detail: your tax is calculated in INR, not dollars or euros. Income in foreign currency is converted using the prescribed exchange-rate rule (commonly referenced as Rule 115 / SBI TT buying rate approach).

How to file taxes on foreign income (ITR) — step-by-step

Many freelancers use presumptive taxation under Section 44ADA because it simplifies reporting.

If you don’t use presumptive taxation (or you’re above the eligible threshold), you typically file a form like ITR-3 and report actual profit after expenses.

A clean tax return with foreign income declared correctly is non-negotiable.

Already taxed abroad? DTAA + Foreign Tax Credit (FTC)

Sometimes foreign clients/platforms withhold tax.

W-8BEN (common US client/platform scenario)

If you work with US platforms/clients, <a href="https://www.skydo.com/blog/filing-w-8ben-and-w-8ben-e-a-guide-for-indian-freelancers-and-businesses">Form W-8BEN</a> is commonly used to establish foreign status and claim treaty benefit eligibility; if you don’t provide it when requested, withholding can apply at a 30% foreign-person withholding rate.&nbsp;

If tax was paid/withheld abroad and a DTAA applies, you can usually claim <a href="https://www.skydo.com/blog/how-to-claim-foreign-tax-credit-with-form-67">Foreign Tax Credit (FTC) </a>in India (subject to rules and documentation).

<a href="https://www.skydo.com/blog/how-to-claim-foreign-tax-credit-with-form-67">Form 67</a> is the key compliance step for FTC. The Income Tax Department’s guidance generally links FTC to filing Form 67 within the specified timeline (commonly described as on or before the end of the assessment year).

Documents freelancers must keep (this actually matters)

When you file taxes on foreign income, documentation is what protects you.

Common mistakes (that cause real problems)

How Skydo helps with tax compliance (without “avoiding tax”)

Skydo isn’t about avoiding taxes. It’s about having clean numbers and clean proof.

Result: you pay the correct tax with less confusion and less paperwork panic.

Tax on Foreign Income: What Indian Freelancers Need to Know (2025)

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Cross-border collaboration is now everyday business. A design team in Berlin works with a marketing agency in Bengaluru, a US SaaS company pays support teams in Manila, and enterprises run truly global vendor and partner networks. However, they also expose firms to fraud, money laundering and complex regulatory risks. Legacy compliance systems (manual reviews, static rules, rigid blacklists) struggle to cope, and traditional fraud detection can become “too slow”, “too rigid”, and “too costly”. 

For example, by the time an irregular payment is flagged under old processes, fraudsters may have long moved the money. In today’s fast-moving market, enterprises need smarter, faster compliance – and that’s where AI in compliance comes in. In fact, <a href="https://www.aiprise.com/blog/ai-powered-compliance-revolutionizing-risk-management#:~:text=That%27s%20why%20AI%20compliance%20software,reduce%20reliance%20on%20manual%20review">68% of financial services</a> firms now list AI-driven compliance and risk management as a top priorityaiprise.com. By continuously learning payment patterns and regulatory changes, AI can identify suspicious activity before damage occurs, rather than reacting after the fact

AI shifts fraud detection from a reactive to a proactive, contextual model. Instead of relying on fixed thresholds or historical blacklists, modern AI systems learn live transaction patterns and “contextualise behaviour”&nbsp;For instance, suppose an Indian exporter usually receives $10,000 a month but suddenly gets $200,000 from a new client. AI-led compliance can flag this anomaly and then automatically analyse the details – checking past payment history, industry norms, and the sender’s profile, rather than outright blocking the transfer. In practice, the system might verify questions like: Has this exporter ever seen such a payment before? Is this amount typical for their industry? Does the payer have a solid history in similar transactions? If anything seems off, AI immediately escalates the case for review. This contextual monitoring greatly reduces blind spots that static rules miss.

Together, these capabilities turn AI into a “predictive firewall” for payments.&nbsp;Fraud is detected before it materialises, false alarms are minimised, and compliance becomes a real-time process rather than a paperwork chase. Importantly, AI doesn’t replace human judgment – it enables teams to work faster and smarter. As Skydo’s experts put it, AI is a “co-pilot” that flags genuine risks while letting human officers concentrate on high-risk cases

Skydo applies these AI capabilities within a modern cross-border payments platform built for exporters. Instead of standard SWIFT wires, Skydo provides virtual multi-currency accounts. When a business signs up, it instantly receives local bank accounts in major currencies (USD, EUR, CAD, SGD, etc.)

From the payer’s view, they simply wire money as if sending a domestic transfer to a familiar bank in their country. For example, U.S. clients pay into a Skydo USD account at a real U.S. bank (Community Federal Savings Bank in New York), European clients use a local IBAN at Barclays, and so on. Behind the scenes, Skydo collects the funds, converts at the real-time mid-market rate, and settles the exporter’s INR account, providing the necessary FIRA/GST paperwork for RBI compliance on the receipt.&nbsp;

In short, Skydo’s platform makes receiving cross-border payments as easy as domestic transfers, but with full audit trails for regulators.

Under the hood, Skydo builds strict compliance right into its platform and adds AI on top. The system is ISO 27001 certified and SOC 2 compliant, meaning it meets top industry standards for data protection and system reliability. 

All payment data is encrypted (at rest and in transit), two-factor authentication is enforced, and 24/7 monitoring detects unusual activity. Skydo is also RBI-authorised (Payment Aggregator – Cross Border), so it must follow rigorous audit and anti-fraud rules just like PayPal or Wise.&nbsp;&nbsp;In practice, this means thousands of compliance and security checks have been built into the platform’s DNA.

Importantly, Skydo’s AI doesn’t operate in a vacuum. It works hand-in-hand with humans. When AI identifies a red flag, compliance staff step in to review the case – but routine alerts are triaged by machine. This hybrid approach minimises false positives and speeds up legitimate payments. As noted above, rather than blocking every match on a sanction list, Skydo’s AI assigns a risk score and only pauses truly high-risk flows.&nbsp; 

Compliance teams can then focus on verifying these real threats, while low-risk transactions sail through. In effect, AI is a compliance copilot – streamlining document checks, sanction screenings, and ongoing monitoring – so the “compliance teams can focus on high-risk cases while AI handles routine screening”

The combination of AI compliance and streamlined rails also makes Skydo’s service remarkably fast and cost-effective. Since Skydo uses local transfers instead of chained wires, payments often settle within a day or two&nbsp;(versus several days for SWIFT). Exporters from India benefit from flat, low fees: Skydo charges a fixed fee (e.g. $19 for payments up to $2,000, $29 up to $10,000) and promises zero hidden markup. By avoiding SWIFT fees and FX spreads, businesses typically cut costs by ~50% compared to banks. And every transaction is fully transparent – the receiver can track the payment end-to-end in real time, eliminating uncertainty.

In practice, this means companies save on fees and get their cash sooner. There are no surprise charges: you pay the invoice amount plus one flat fee, and you receive the full agreed foreign currency (since Skydo never skims an extra margin on the FX rate). This financial efficiency, combined with AI-backed security, lets businesses send or receive cross-border payments “as safe as any major bank transfer", but without the typical delays and costs.

AI in compliance is powerful, but it’s not a magic bullet – Skydo’s approach recognises that. Every AI-generated alert or decision in the system is backed by traceable logic and human review. The platform logs detailed decision trails for each transaction, so auditors can always answer “why” a payment was approved or flagged. And models are regularly updated and tested. The engineering team uses AI even to bolster security (generating test cases, simulating attacks, etc.), but compliance officers remain the final arbiter of high-risk cases.&nbsp;&nbsp;In short, Skydo’s motto is “compliance by design”; security and regulatory checks are built into every service layer from day one.

By taking this holistic approach, Skydo demonstrates that AI in compliance can keep cross-border money both clean and fast. Machine learning stops fraudsters and speeds approvals without adding extra paperwork for legitimate users. Meanwhile, certifications (ISO, SOC2, RBI licensing) and real bank partnerships ensure the system is trustworthy and fully auditable. Today, Skydo serves over 30,000 Indian exporters and handles hundreds of millions of dollars in cross-border flows. For enterprises expanding internationally, Skydo’s AI-powered solution shows how advanced technology and smart processes can turn a compliance headache into a competitive advantage – keeping global payments secure, streamlined, and swift.

AI in Compliance: How Skydo Keeps Cross-Border Money Clean (and Fast)

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You've figured out the product sourcing. Your Amazon listings are converting well. Orders are flowing in from international markets. But then someone talks about compliance documents like <a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">FIRA</a> and<a href="https://www.skydo.com/blog/what-is-e-brc"> eBRC</a>, and to you, they might as well be words in a foreign language because you have no idea what they mean.&nbsp;

Most Amazon global sellers from India are first-time exporters. While you've cracked the export and product side of things, compliance still feels like navigating a maze with a blindfold on. You know Amazon handles the platform logistics, but RBI and GST compliance? That's still on you.

The frustrating part is how these acronyms get thrown around without proper explanation. FIRA, eBRC, FIRC – they sound similar but serve completely different purposes. Missing any of these can mess with your payments, tax filings, or even your ability to continue selling internationally.

This guide will break down precisely what FIRA and eBRC are, why you need both, how they differ, and, most importantly, how to obtain them without the usual bureaucratic struggles.

What is FIRA (Foreign Inward Remittance Advice)?

When Amazon Global Selling deposits your international sales earnings into your Indian bank account, your bank creates this document as proof that foreign funds from your overseas sales actually arrived.

Your bank or payment service provider issues FIRA every time foreign currency is converted and credited to your account. You typically need to request it from your bank when foreign currency is converted and credited to your account, and the banks generally charge a fee for issuing the same. Platforms like Skydo issue FIRA instantly, that too free of cost.&nbsp;

The document includes your details as the beneficiary, the exact amount received, the currency from which it originated, the conversion rate used, and a purpose code that explains the reason for the transfer. For Amazon sellers, this purpose code typically indicates export income.

FIRA serves as your primary evidence that you earned legitimate export income. Your chartered accountant needs it for maintaining your books. The GST department requires this information when you file returns or claim input tax credits. If you're planning to claim any government export incentives or refunds later, FIRA becomes essential documentation.

Every business receiving foreign payments needs FIRA, whether you're selling products on Amazon or providing services to international clients. There's no getting around this requirement if money is flowing from overseas into your Indian accounts.

What is eBRC (Electronic Bank Realisation Certificate)?

eBRC goes one step further than FIRA. While FIRA merely confirms that foreign money has arrived, eBRC proves explicitly that you have been paid for exports that you have already shipped out of India.

Your bank generates <a href="https://www.skydo.com/blog/what-is-e-brc">eBRC</a> after matching your export documents with the payment received. It's essentially saying "yes, this person exported goods worth X amount, and yes, they actually got paid for it." The system cross-checks your shipping bill or SOFTEX form with the incoming payment to create this certificate.

If you're selling physical products through Amazon FBA or any other export method, you need eBRC. This applies to all Amazon Global sellers regardless of scale - whether you're shipping five units to the US or 500 units to the UK, you're still classified as a goods exporter under Indian law. Even a single product sold through Amazon Global Selling to an international customer, which has earned you foreign currency, requires eBRC compliance.

eBRC unlocks several financial benefits that FIRA alone cannot. When you apply for duty drawback (to receive refunds on customs duties paid), the system requires eBRC as proof. Export promotion schemes and incentives require eBRC to verify your legitimate export earnings.

Beyond these benefits, eBRC is also a mandatory compliance requirement under the Foreign Exchange Management Act (FEMA) regulations. The RBI and DGFT require all goods exporters to file an eBRC to prove that export proceeds have been realised. This isn't optional - it's a legal obligation that comes with being classified as a goods exporter.

During GST audits or when claiming GST refunds for exported goods, officers will specifically request an eBRC. They want to confirm that your zero-rated exports actually resulted in foreign exchange earnings. Without eBRC, these processes become much more complicated, and you might miss out on money that's rightfully yours. More importantly, missing eBRC can lead to compliance violations and potential penalties.

Here's how these two documents compare across different aspects:

The primary difference lies in scope and purpose. FIRA covers all foreign payments entering India, while eBRC specifically tracks export payments.

Your bank or payment service provider creates FIRA and gives it directly to you as a PDF document. For eBRC, your bank still generates the data, but then uploads it as an XML file to the DGFT portal. You access eBRC through government systems rather than getting it directly from your bank. Skydo provides automated eBRC to Amazon Global sellers.

FIRA works for general accounting and tax purposes. Your CA uses it for maintaining books, and you need it for GST filings or as proof of income. eBRC becomes essential when dealing with export-specific benefits. Government incentive schemes, duty drawback claims, and DGFT compliance all require eBRC to verify that your exports actually generated foreign exchange for India.

Why Amazon Sellers Need Both FIRA and eBRC

Amazon global sellers fall under the category of goods exporters according to Indian law. This classification applies regardless of whether you use FBA, Easy Ship, or handle shipping yourself. You're moving physical products across borders and receiving foreign currency, which automatically triggers RBI and DGFT compliance requirements.

Your legal obligations as a goods exporter

The government requires two specific documents from every goods exporter:

How the documents work differently

Payment providers like Skydo, Wise or PingPong typically issue FIRA as proof of inward remittance. This covers the basic requirement of showing that foreign money arrived.

eBRC comes from an Authorised Dealer bank and gets uploaded directly to the DGFT portal. It serves as official proof of export realisation under FEMA regulations. Skydo has automated this process specifically for Amazon global sellers, which removes much of the manual paperwork.

Missing eBRC blocks several critical financial processes:

Without FIRA, your accounting becomes messy:

The bottom line: FIRA proves the money came in, eBRC proves it came as export income. You need both documents to stay compliant and audit-ready.

 Most payment platforms stop at FIRA, leaving sellers to figure out eBRC on their own. Many exporters only realise its importance during tax season, when reconstructing months of exports becomes a nightmare. The manual bank process takes weeks, multiple visits, and often extra CA fees. For first-time exporters, the jargon and lack of clear guidance make it even harder. Missing eBRC means delayed filings and lost incentives.

Skydo is built for Amazon Global Sellers. We automatically generate both FIRA and eBRC for your transactions, downloadable directly from your dashboard. Each payment is mapped with IEC and purpose code, making you audit-ready and tax-compliant. Plus, you get live FX rates with zero markup, so your margins stay intact.

The Takeaway
For Amazon sellers, Skydo eliminates the biggest operational headache of compliance, so you can focus on selling, while we handle the paperwork.

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EOU full form

“Is a commercial invoice and a bill the same?” This is a common question.&nbsp;

The answer is: a commercial invoice is more than just a bill. It’s a key document that your bank, tax authorities, and even regulators check. It serves as proof of export, helps you get paid, and ensures you remain legally compliant. It applies to all exporters selling physical goods, SaaS, or services, such as consulting.

In this guide, you’ll learn exactly who needs a commercial invoice, when to create one, what details to include, and how to structure it. To make things even easier, you’ll also find templates and a sample invoice you can use right away.

A commercial invoice is a legal document issued by an exporter to the foreign buyer. It contains transaction details, such as who sold what, for how much, and how the payment is expected.&nbsp;

For example, you provided IT services to a firm based in Germany. You issue a commercial invoice that mentions the company name, its address, the total fee, and how you expect to receive payment (such as via bank transfer).

Due to its comprehensiveness, it acts as a:

Who Needs a Commercial Invoice for Export?&nbsp;

If you’re a seller, you need a commercial invoice. But in this blog, we will only cover how a commercial invoice applies to various types of export business. Read on to find out the types and the category of export you belong to&nbsp;

Freelancers, agencies, and consultants exporting digital services, like marketing, design, SaaS, or IT, fall into this category. A commercial invoice is applicable for all of them.&nbsp; For example, a Bangalore-based design agency working for an Australian e-commerce website must issue a commercial invoice for the project fee. The same applies to an independent freelancer.

Product exporters selling goods internationally

If you’re selling physical products via Amazon Global, Shopify, or other B2B channels, you’re an exporter. Each shipment you send out must accompany a commercial invoice. For example, an Indian handicraft exporter sells hand-woven rugs to customers in the US through Amazon Global. For every order he receives, he creates a commercial invoice containing the buyer's details and product description, like size, quantity, and price. This also helps him get the customs clearance without any delays.

Anyone receiving foreign currency for contract work

Let’s say you provide services only under a contract or agreement to foreign clients. This means you’re earning foreign exchange, and therefore, you need a commercial invoice. For example, an Indian IT company enters into a six-month software maintenance contract with a UK agency. The IT company generates a commercial invoice each month mentioning the nature of services provided, purpose code, amount, and bank details.&nbsp;

Why is a commercial invoice needed for export?

You might have observed that even when no physical shipment is involved, exporters still need a commercial invoice. Here are the reasons behind it:&nbsp;

When Is a Commercial Invoice Required in the Export Journey?

The best time to send out a commercial invoice is right after delivering the service or shipping the product. Here are the reasons why we think this is the best time:

Raising an invoice is an indicator that your job is done, and the client can initiate the payment. A commercial invoice documents the job details and the total amount the client must pay to fulfil the deal&nbsp;

To submit to your bank when an inward remittance is received

When your payment arrives from overseas, banks require the commercial invoice as proof of the transaction. This helps them process the remittance and comply with RBI regulations&nbsp;

💡Special note if you’re a freelancer: There could be cases where your client would not specifically ask for a commercial invoice. Here’s a common scenario: you could be working with a startup or a small agency for over a year now. You have a great camaraderie with your client, and they trust you with your work. When it’s time to pay, they only ask for your bank details; No commercial invoice required. However, when the payment arrives in your Indian account, say $1200, your bank might ask for the invoice for compliance purposes. Therefore, even when the client doesn’t ask for it, generate a commercial invoice and save a copy

What Should Be Included in a Commercial Invoice for Export?&nbsp;

Here’s a clear, easy-to-understand checklist of the key fields you should include in your commercial invoice, along with concise descriptions for each:

✅&nbsp;Tips for exporters: While there are multiple purposes linked to the type of remittance you receive, here are some of the most common ones applicable to exporters

RBI Category:&nbsp;Computer &amp; Information Services

RBI Description:&nbsp;Software implementation/consultancy (other than those covered in SOFTEX form)

When to use:&nbsp;This code signifies a foreign payment in exchange for software consultancy or implementation service, provided to a foreign client. It's important to note that P0802 applies specifically to software consultancy or implementation services that are not reported under the&nbsp;<a href="https://vjmglobal.com/fema/fema-fema/introduction-to-software-export-declaration-softex-form/" rel="nofollow" target="_blank">SOFTEX form.</a>&nbsp;If your services fall under SOFTEX, a different code might be used.

RBI category:&nbsp;Computer &amp; Information Services

RBI Description:&nbsp;Hardware consultancy

When to Use:&nbsp;This code is used when exporters receive foreign payment for providing hardware consultancy or implementation services abroad.

RBI Description:&nbsp;Off-site Software Exports

When to Use:&nbsp;This code signifies that an Indian company is receiving payment for software development or IT services provided to a foreign client, but the work itself is done in India.

RBI Description:&nbsp;Advance receipts against export contracts (export of goods only)

When to Use:&nbsp;This is used when businesses receive advance payment against the contract of the goods to be exported. In other words, here the company receives payment for goods before they are shipped.

Sample Commercial Invoice for Export (Service)

Based on what we have covered so far, here’s a sample format of a commercial invoice for service exporters: 

Commercial Invoice Template for Export: How to Structure Yours&nbsp;

You can use software to create commercial invoices for your export business. But if you’re doing it on your own, without using software, here’s what you must know:&nbsp;

Common Mistakes to Avoid in Export Invoices

Most exporters make mistakes while creating an export invoice for the first time. Often, these mistakes are small errors, but they can cause delays and frustrations later on. Here’s a quick look at a few of these common mistakes and why you must avoid them:

Exporting is already challenging, your payments and compliance shouldn’t make it harder. With Skydo, you don’t just create invoices, you create confidence. Every payment is tracked in real time, every compliance document is auto-generated, and every export counts without delays or hidden costs. Whether you’re a freelancer, a fast-growing agency, or an Amazon Global seller, Skydo gives you a single platform to get paid faster, stay fully compliant, and scale globally with ease.

👉 Don’t let paperwork slow your growth. <a href="https://www.skydo.com/">Sign up for Skydo</a> today and make every export effortless.

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Commercial invoice

EOU stands for Export Oriented Unit - it's a special business status that allows you to import raw materials and machinery without paying customs duties. The trade-off here is that you commit to exporting most of what you produce.

When freelancers and small businesses search for "EOU full form in export" or "EOU full form in customs," they're usually trying to understand this specific scheme that helps Indian companies compete globally by reducing their import costs.

Export Oriented Units are those units that undertake to export their entire goods and services under India's Foreign Trade Policy. The scheme started in 1981 to promote exports and increase net foreign exchange earnings.

The beauty of the EOU scheme is its simplicity. If you're genuinely focused on exports, the government makes it easier to access inputs without the usual customs headaches that can eat into your margins.

Who Should Care About EOU? (And Why It Matters)

The scheme is most effective for manufacturers and large-scale exporters that regularly import raw materials, components, or machinery.&nbsp;

For example, textile manufacturers bringing in fabric, electronics companies importing components, or jewellery makers sourcing precious metals. These businesses see immediate impact because they're already dealing with hefty customs bills every month.

B2B hardware exporters, in particular, benefit since they often require specialised equipment and materials that are subject to high import duties. When you're importing $50,000 worth of materials monthly and paying 15-25% in various responsibilities, the savings add up fast.

Here's where it gets tricky for most freelancers and service providers. If you're doing SaaS development, content writing, or digital marketing services, the EOU scheme won't directly help since your main "inputs" are skills and software subscriptions.

But understanding EOU still matters if you're service-focused. Many freelancers eventually scale into product businesses - that graphic designer might start selling merchandise internationally, or the developer might launch hardware. Knowing about EOU gives you a head start for these transitions.

The EOU scheme operates on a straightforward deal with the government: you commit to exporting 100% of your production (with some flexibility), and in return, you are allowed to import your inputs without paying customs duties.

Goods remain duty-free as long as they're exported. If you decide to sell some of your production in the domestic market (which is allowed up to 50% of your export value), you'll need to pay the duties that were initially exempted.&nbsp;

This ensures the system remains honest and that the benefits genuinely support export activities.

One important limitation that many people overlook is that EOUs aren't restricted to specific zones or locations, unlike Special Economic Zones (SEZs).&nbsp;

You can set up an EOU anywhere in India as long as you meet the scheme's criteria. This flexibility makes it accessible to businesses in smaller cities or rural areas that want to tap into export markets without relocating to designated industrial zones.

The customs duty exemptions are the headline benefit that draws most businesses to the EOU scheme.&nbsp;

EOU vs SEZ vs STPI: What’s the Difference?

Understanding these three export schemes can save you from applying to the wrong one and wasting months in the process. Each targets different types of businesses and comes with its own set of rules.

EOUs (Export-Oriented Units) are designed for businesses focused on product exports, such as manufacturing, textiles, or hardware. You can set up an EOU anywhere in India, offering location flexibility that other schemes don't provide. The GST refund process is straightforward, and you get duty-free imports as long as you export your production.

SEZs (Special Economic Zones) cast a wider net, supporting all types of exports from manufacturing to services. However, you're restricted to specific designated zones, which limits where you can operate. The GST situation becomes more complex in SEZs - while you may not be required to pay GST on specific transactions, the refund process can be more complicated, depending on your particular setup.

STPI (Software Technology Parks of India) focuses specifically on IT and software exports. There are no location restrictions, so you can operate from anywhere in India. The GST refund process works well for tech services, and the compliance requirements are generally more suited to software development workflows.

Can Freelancers or Service Exporters Use the EOU Scheme?

No - the EOU scheme is specifically designed for goods exports, not services. If you're a freelancer doing web development, content writing, or digital marketing for international clients, EOU won't help you.

The scheme requires you to manufacture or produce physical products that can be exported. Even if you're creating software products, the EOU framework isn't built for digital deliverables. You need tangible goods that can be physically tracked through customs.

If you're exporting software or IT services, the STPI is the relevant scheme you should consider instead. STPI (Software Technology Parks of India) is specifically designed for tech services and software exports, with compliance processes that are tailored to digital work.

For most service exporters, there are better and simpler options that don't require the complexity of special schemes:

<a href="https://www.skydo.com/blog/all-you-need-to-know-about-lut-for-tech-service-export">LUT</a> under GST (Letter of Undertaking) lets you export services without paying GST upfront, then claim refunds later. This is probably the most straightforward option for freelancers who are already registered for GST.

<a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide">The Foreign Inward Remittance Certificate (FIRC)</a> helps you properly document your export earnings for tax purposes and RBI compliance. Every service exporter should understand this regardless of which scheme they use.

Platforms like Skydo handle the compliance side automatically, making it easier to receive international payments without worrying about export documentation or RBI requirements.

The bottom line: if you're doing services, don't waste time applying for EOU. Focus on GST LUT and proper documentation instead.

How to Register as an EOU (Only if you're eligible)

The EOU registration process is more straightforward than most people expect, but it requires getting each step right to avoid delays and rejections.

Submit your application to the <a href="https://handicrafts.nic.in/">Development Commissioner</a> with detailed information about your proposed operations, export plans, and investment details. You need to demonstrate genuine export potential and explain how you'll meet the scheme's requirements. The Development Commissioner's office will review your application and either approve or reject it based on your sector and feasibility.

Once approved, you'll receive a Letter of Permission (LoP) that gives you official authorization to set up your EOU. This letter is valid for two years, during which you must establish your operations and install the necessary equipment. If you need more time, you can request a one-year extension; however, please note that multiple extensions are not guaranteed.

Install bonding and customs procedures at your premises before you can start importing duty-free goods. This involves customs officials inspecting your facility and setting up tracking systems to monitor what comes in and goes out. The bonding process ensures that duty-free imports are only used for export production, not diverted to the domestic market.

Throughout your operations, you must maintain Net Foreign Exchange (NFE) obligation - essentially proving that your exports generate more foreign currency than you spend on imports. This is calculated over a five-year block period, providing you with some flexibility during tough years, as long as you maintain a positive NFE cumulatively.

If you're in services, EOUs aren't directly applicable to your current setup. However, if you plan to scale into manufacturing exports or hybrid product-service models, this knowledge becomes valuable for future planning.

The key is staying aware of export schemes that match your business model. For service exporters, focus on GST LUT and proper documentation rather than pursuing manufacturing-focused benefits.

Whether you're using traditional export schemes or modern solutions like Skydo for seamless international payments and compliance, understanding the landscape helps you make better decisions as your business evolves.&nbsp;

Keep EOUs in your back pocket for when you're ready to move beyond pure services.

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India's software-as-a-service (SaaS) market is projected to reach <a href="https://www.bvp.com/atlas/rise-of-saas-in-india-2023">$50 billion </a>in annual recurring revenue by 2030, nearly quadrupling its current size. While "India-first" companies like Perfios and M2P serve the domestic market, "global-first" companies like Zoho, Freshworks, and Icertis are winning clients worldwide.

If you're in the second category, building for international markets, two compliance areas directly impact your bottom line: ensuring compliant payment through proper FIRA documentation, and recovering funds through GST refunds on your business expenses.

This guide breaks down both processes for SaaS exporters in 2025.

What is FIRA, and Why Do SaaS Exporters Need It?

<a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">FIRA stands for Foreign Inward Remittance Advice</a> (sometimes called by its old name, FIRC - Foreign Inward Remittance Certificate). Your bank or payment provider issues this document whenever foreign currency gets credited to your Indian account.

It is an official receipt that proves foreign money actually reached you. When your US client pays $5,000 for your annual software license, that payment doesn't just appear in your account - it goes through foreign exchange conversion, and your bank creates a paper trail.

Why FIRA matters for your business:

Obtaining FIRA documentation correctly is essential for meeting three key compliance requirements.&nbsp;

In most cases, SaaS founders discover this requirement only when they try to claim their first GST refund and realize they're missing essential documentation. The key is to set up proper collection processes from day one, rather than scrambling to gather historical records later.

How to Get FIRA for Your SaaS Business?&nbsp;

Your FIRA process depends on how you receive international payments, and each method has different requirements and timelines.

Traditional SWIFT bank transfers through banks like ICICI or HDFC will generate FIRA automatically, but you need to request copies from your bank. Most banks charge a small fee (typically ₹100-500 per document) for FIRA documents and may take 2-3 business days to provide them. While some banks may email these automatically, most require you to visit a branch or request them through internet banking.

Payment platforms like PayPal typically provide monthly digital FIRA statements that consolidate all your international receipts for that period. You'll need to download these from your <a href="https://www.skydo.com/blog/paypal-transaction-fees-india">PayPal business account</a> and ensure they include all required details for GST compliance.

Specialised platforms like Skydo automatically generate FIRA for every individual transaction as soon as the payment is processed. This real-time approach eliminates the waiting period and manual requests that come with traditional banking.

Regardless of your payment method, every FIRA document must include:&nbsp;

Missing any of these details can delay the processing of your GST refund, so always verify the completeness of your claims before filing.

GST Refunds for SaaS Exporters: What You Need to Know

The Indian GST system treats SaaS exports as zero-rated supplies under Section 16 of the IGST Act, which means you charge 0% GST to your international clients. However, you're still required to pay GST on business inputs, such as office rent, software subscriptions, and professional services.

This creates a cash flow situation where you're paying GST on your costs but not collecting it from your revenue. The government recognizes this imbalance and provides two options for handling GST on exports.

Option 1: Pay GST first, then claim a refund&nbsp;

You can pay the full 18% GST on your export invoices and then file for a complete refund later. While this guarantees you'll get your money back, it ties up significant working capital that most growing SaaS companies can't afford to lock away.

Option 2: Letter of Undertaking plus input tax credit refund&nbsp;

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