Tax + Tech Guide

How to Sell SaaS with GST Invoice in India — Complete 2026 Guide

Indian SaaS companies must navigate GST registration, e-invoicing, OIDAR compliance for foreign customers, and refund mechanics. Getting this right from day one saves expensive restatements and customer disputes later. Below is the practical 8-step playbook for Indian SaaS startups.

Step 1 — Register for GST (mandatory above ₹20 lakh turnover): Below ₹20 lakh annual turnover, GST registration is optional. Above ₹20 lakh, mandatory. Register on gst.gov.in: business details, PAN, bank account, place of business. Get GSTIN within 7 days. For SaaS startups expecting to cross ₹20 lakh quickly, register from day one to avoid retrospective registration headaches.
Step 2 — Determine HSN/SAC code for your SaaS: SaaS is classified under SAC 998313 (Software Development Services) or 998312 (Information Technology Consulting Services) depending on offering. Most cloud-hosted software billed on subscription = 998313. GST rate: 18%. Apply this consistently across all invoices.
Step 3 — Set up GST-compliant invoicing: Use a GST-ready billing tool: Zoho Books, Tally Prime, or Razorpay Subscriptions. Invoice must include: your GSTIN, customer GSTIN (B2B) or "Unregistered" (B2C), HSN/SAC code, taxable value, CGST/SGST/IGST breakup, total. For interstate B2B: IGST 18%; intrastate: CGST 9% + SGST 9%.
Step 4 — Enable e-invoicing if turnover exceeds threshold: For Indian businesses with aggregate annual turnover exceeding ₹5 crore (current threshold as of 2026), e-invoicing is mandatory. Configure your billing tool with GSTN credentials — every invoice generates an Invoice Reference Number (IRN) and QR code from GSTN portal automatically. Non-compliant invoices are invalid.
Step 5 — Handle foreign customers correctly: For non-Indian customers (B2B or B2C), SaaS export is considered "export of services" — zero-rated under GST if export-of-services conditions are met. Charge ₹0 GST, claim refund of input tax credit. Important: payment must be received in convertible foreign exchange (USD/EUR/GBP via SWIFT, Stripe, Wise) to qualify as export.
Step 6 — Manage RCM for foreign SaaS suppliers you use: When you use foreign SaaS (Stripe, AWS US, Zoom direct, Slack), you owe reverse-charge GST (18% IGST) on those invoices. Pay IGST in your monthly GSTR-3B, then claim same IGST as input tax credit in same return. Net cash effect is zero but skipping this is a common compliance failure.
Step 7 — File monthly returns (GSTR-1, GSTR-3B): GSTR-1 (sales) by 11th of next month. GSTR-3B (summary + tax payment) by 20th of next month. For most SaaS startups, both are auto-generated from billing tool (Zoho Books, Tally) and require review + filing. Annual return GSTR-9 by Dec 31 of next financial year.
Step 8 — Set up GST refund for export of services: For SaaS exports, you can claim refund of unutilised input tax credit (ITC). File RFD-01 quarterly or annually via GST portal. Documents needed: invoices showing FIRC (Foreign Inward Remittance Certificate) from your bank, export documentation, ITC computation. Refund typically processed in 30-60 days.

Frequently Asked Questions

Do I need to register for GST as a small Indian SaaS startup?

Mandatory above ₹20 lakh aggregate turnover. Below ₹20 lakh, optional — but advisable to register early because: (1) customers (especially B2B) prefer suppliers with GST invoice, (2) you can claim input tax credit on your SaaS expenses, (3) avoid retrospective registration if you cross threshold mid-year.

Is SaaS taxable under GST in India?

Yes, at 18%. SaaS is classified as "Online Information and Database Access or Retrieval Services" (OIDAR) under GST. Place of supply rules apply: B2B India customer → CGST+SGST (intrastate) or IGST (interstate); B2C India customer → CGST+SGST or IGST; B2B/B2C foreign customer → export of services, zero-rated.

How does Indian SaaS sell to foreign customers without charging GST?

SaaS export of services is zero-rated under GST if: (1) supplier is in India, (2) recipient is outside India, (3) place of supply is outside India, (4) payment received in convertible foreign exchange, (5) supplier and recipient are not "establishments of distinct person". Most Indian SaaS startups selling globally meet all 5 conditions and charge ₹0 GST.

What is OIDAR and does my SaaS qualify?

OIDAR = Online Information and Database Access or Retrieval Services. Includes: cloud software, digital advertising, online streaming, e-books, online courses, web-based databases. Most modern SaaS is OIDAR. Implication: special place-of-supply rules for B2C foreign customers (location of recipient, not supplier).

When is e-invoicing mandatory for Indian SaaS companies?

As of 2026, e-invoicing is mandatory for businesses with aggregate annual turnover above ₹5 crore in any preceding financial year. The threshold has been progressively lowered from ₹500 crore (2020) to ₹5 crore (2023). Indian SaaS startups should plan to enable e-invoicing in their billing tool (Zoho Books, Tally) once they approach ₹5 crore.

Free GST + e-invoicing setup for Indian SaaS startups — Zoho Books or Tally with export-of-services workflow.