Short answer: zero-rating gets the invoice out without GST. Getting the refund back turns on proving you were paid — and for services, unlike goods, there is no shipping bill doing that work. The FIRC or eBRC is the proof. The FEMA clock those documents run against changes on 1 October 2026.
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Export of services: the realisation clock, and the refund that depends on it
CA K Sanjay Bhargav, Chartered Accountant, Bengaluru
Membership No. 250054 · DISA (ICAI)
Published
Why service exporters carry a burden goods exporters do not
A goods exporter has a shipping bill. It is filed with customs, it is matched electronically, and it evidences that goods physically left India. Much of the refund machinery keys off it.
A services exporter has nothing equivalent. Nothing physically crosses a border, and the only external evidence that the export happened at all is that money came in from abroad. That is why Rule 89(2)(c) of the CGST Rules requires, for export of services, a statement carrying the invoice numbers and dates together with the relevant Bank Realisation Certificate or Foreign Inward Remittance Certificate — the Statement 3 that accompanies the claim.
The consequence is structural: for a service exporter, getting paid is part of the tax position, not merely a commercial matter that follows it.
FIRC and eBRC
Both come from your authorised dealer bank and both evidence receipt of foreign currency.
| FIRC | The older certificate, issued directly by the bank |
| eBRC | The electronic bank realisation certificate, generated through the DGFT portal — now the more widely used proof |
What matters for the refund is not the label but whether the evidence ties the receipt to the invoices being claimed. A lump-sum remittance covering several invoices, or a receipt net of bank charges or platform fees, is where reconciliation breaks down — and it breaks down at the claim stage, months after anyone could easily fix it.
The clock changes on 1 October 2026
This is the part worth acting on now.
The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 were notified in January 2026 and come into force on 1 October 2026. They replace the 2015 regulations together with the associated Master Directions and 167 circulars — a consolidation, not a tweak.
Under them, for services and software:
| Period | |
|---|---|
| Realisation and repatriation | 15 months from the date of the invoice |
| Where invoiced and/or settled in Indian rupees | A further three months — 18 months |
| Extension | The AD bank may grant one under its own policy and SOP |
Note what the period runs from. For services it is the date of the invoice, not a shipping date, which is the natural anchor when nothing ships.
Until 1 October the earlier framework governs, and its period is not the same. Much of the guidance online still quotes the older figure, and some of it now quotes the new one as though it were already live. Neither is safe as a general answer: the date of your invoice decides which clock you are on, and for invoices raised around the changeover that question needs answering deliberately rather than assumed.
If the money does not arrive
Two consequences, and exporters usually see only the first.
The refund. An invoice with no realisation behind it has no Rule 89(2)(c) evidence, and the claim on it does not stand up.
FEMA, separately. Unrealised export proceeds are a contravention in their own right, dealt with under Section 13 — a civil penalty measured against the sum involved. That exposure exists whether or not you ever claimed a refund.
Write-off routes and extensions exist, and an AD bank may extend under its own policy. Neither is automatic, and neither is a way of tidying this up afterwards.
When the department says the proof was not produced
A practical point with local weight. In Mavenir Systems (P.) Ltd. v. Union of India, the Karnataka High Court dealt with a refund rejected on the ground that eBRC and FIRC had not been produced — when they had in fact been filed with the reply to the show cause notice. The court held the rejection unsustainable and directed the refund to be processed with interest.
It is worth knowing that a procedural assertion of non-production does not override the statutory entitlement, and that a Karnataka bench has said so. It is worth rather more to make the evidence impossible to overlook: filed against each invoice, reconciled, and referenced in the claim itself.
What to hold on file
- The export invoices, and the LUT if you are on that route
- The FIRC or eBRC for each receipt, from your AD bank
- A reconciliation tying receipts to invoices, including part payments and amounts netted for bank or platform charges
- The contract or engagement terms establishing the overseas recipient
- A note of the invoice date against the applicable realisation period
Whether the supply qualifies as an export in the first place is the prior question, and it fails more often on the place-of-supply and establishment tests than on anything documentary — the five conditions come first. Where the concern is being treated as an intermediary rather than an exporter, section 13(8)(b) was omitted with effect from 30 March 2026. And the mechanics of the claim itself are in the practical refund file.
This is a working reference on the general framework, not advice on a particular export. The realisation period, the commencement of the 2026 Regulations, and write-off and extension routes are set by RBI regulation and AD bank policy and change from time to time; the Karnataka decision referred to is cited as persuasive rather than settled. Confirm the position for your own invoice dates before relying on it.
Frequently asked questions
Do I need an FIRC or eBRC to claim a GST refund on exported services?
Yes — and this is the point at which service exporters differ from goods exporters. Rule 89(2)(c) of the CGST Rules requires a statement containing the number and date of the invoices along with the relevant Bank Realisation Certificate or Foreign Inward Remittance Certificate. For goods the shipping bill does much of the work; for services there is no shipping bill, so the realisation evidence is the proof that the export happened at all.
What is the difference between an FIRC and an eBRC?
Both are issued by your authorised dealer bank and both evidence that foreign currency was received. The FIRC is the older certificate issued directly by the bank; the eBRC is the electronic bank realisation certificate generated through the DGFT portal, and it has become the more widely used proof. What matters for a refund is that the evidence ties the receipt to the invoices being claimed — not which of the two labels is on it.
How long do I have to receive payment from an overseas client?
A FEMA period applies, and it is about to change. Under the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 — notified in January 2026 and in force from 1 October 2026 — the period for services and software is 15 months from the date of the invoice, with a further three months where the export is invoiced or settled in Indian rupees. Until that date the earlier framework governs, and the period under it is not the same, so the date of your invoice decides which clock you are on.
Can the department refuse my refund because remittance proof was not produced?
Not where it was in fact produced. In Mavenir Systems (P.) Ltd. v. Union of India the Karnataka High Court held that rejecting a refund on the ground of non-production of eBRC or FIRC, when those documents had already been filed with the reply to the show cause notice, was unsustainable, and directed the refund to be processed with interest. A procedural assertion does not override a statutory entitlement — though the practical answer is to make the evidence impossible to overlook in the first place.
What happens if the client simply never pays?
Two separate consequences, and people usually see only the first. The refund claim on that invoice has no realisation behind it. Separately, unrealised export proceeds are a FEMA matter in their own right, and contravention is dealt with under Section 13 — a civil penalty measured against the sum involved. Write-offs and extensions exist as routes, and an AD bank may grant an extension under its own policy, but neither is automatic and neither is retrospective housekeeping.
Does the LUT route change any of this?
It changes what you are claiming, not what you must prove. Under a letter of undertaking you export without paying IGST and claim a refund of accumulated input tax credit; on the pay-and-reclaim route you pay IGST and claim that back. Either way the export has to be established, and for services that means the realisation evidence. The LUT saves working capital; it does not save documentation.
Exporting services and sitting on unclaimed refunds?
Send your export invoices, the LUT position and whatever realisation evidence your bank has issued. Whether the refunds are claimable, whether anything is running against the FEMA clock, and what the file needs are established before a claim goes in.
Related service: Service Exports & IT Firms