A US brand paid you $5,000. List it as a “gift” and you could owe 18% GST on it.
For an Indian creator, a payment from a foreign brand is an “export of services” — zero-rated for GST if you get five conditions right, fully taxable at 18% if you get the paperwork wrong. The single most common mistake is the purpose code at your bank. Here is how the FIRC, the purpose code, and the export test actually work.
By Sumit Kumar
A tech reviewer in Bengaluru lands a Silicon Valley brand. The brand wires $5,000 to their bank account. The bank's portal asks the creator to classify the inward payment, and — not knowing the rules — they pick “Gift.” The money lands. Done, they think.
Six months later, filing GST, the creator claims this as an “export of services” at 0% tax. The GST department audits the claim, finds the bank never issued the right certificate for services, and rules the payment doesn't meet the export test. The result: an 18% IGST demand on the $5,000, plus penalties — on money that was never supposed to be taxed at all.
The frustrating part is that the creator did the work, earned the money, and qualified for zero tax. They lost the exemption on a dropdown. This post explains the cross-border rules so that doesn't happen to you.
A foreign payment is an “export of services”
When you, sitting in India, do paid work for a brand outside India, the tax system treats it as an export of services under the IGST Act. Exports are “zero-rated” — meaning 0% GST — which is good news, if you satisfy five conditions. Miss any one and the payment loses its export character and becomes an ordinary 18% taxable supply.
The five conditions:
- The supplier (you) is in India.
- The recipient (the brand) is outside India.
- The place of supply is outside India (determined under Section 13 of the IGST Act).
- Payment is received in convertible foreign exchange (or in INR where the RBI permits).
- The two parties are not merely two arms of the same entity (“distinct persons”).
Condition 4 is the one the “gift” mistake breaks. To prove you received convertible foreign exchange for a service, you need your bank to issue the right certificate — and the bank only does that if you classified the inflow correctly.
The two pieces of paper that prove it: FIRC and purpose code
Two things turn “dollars landed in my account” into “documented export of services”:
The FIRC (Foreign Inward Remittance Certificate). This is the document your Authorized Dealer (AD) bank issues confirming you received foreign currency. It is the evidence condition 4 relies on. No FIRC for services, no proof of export — which is exactly where the Bengaluru creator's claim collapsed.
The purpose code. When the money arrives, you tell the bank why — via an RBI purpose code. For creator/advertising/marketing work, the relevant family is the P08xx series (for example, P0805 for advertising, trade fair, and related services). Picking “Gift,” “personal transfer,” or the wrong code tells the bank this wasn't a service — so it doesn't issue a services FIRC, and your export claim has no foundation.
Two more numbers worth knowing:
- For outward remittances under the Liberalised Remittance Scheme (LRS), the TCS (tax collected at source) threshold in 2026 is ₹10 lakh per financial year. This matters if you're paying foreign vendors, not when you're receiving.
- For some cross-border payments your CA may file Form 15CA/15CB — routine compliance paperwork, not a penalty in itself.
The fix: get it right at the moment money arrives
The whole problem is that the decision happens at an inconvenient time — when the money lands and a bank portal asks you to classify it fast. Build the habit before then:
- Know your purpose code before the wire arrives. For brand/marketing work, it's the P08xx family — confirm the exact code with your bank or CA for your service type. Never classify a service payment as a gift or personal transfer.
- Ask the bank to issue the FIRC for the remittance. Some banks issue an e-FIRC automatically; many don't unless you ask. Collect and file it per payment.
- Keep the contract and invoice that show it's a service. The export test is easier to defend when the paper trail says “marketing services” end to end — contract, invoice, purpose code, FIRC, all consistent.
- Loop your CA in for 15CA/15CB if applicable. Don't let it be a year-end surprise.
“Convertible foreign exchange” is a test, not a vibe. The exemption doesn't hinge on the dollars arriving — it hinges on your being able to prove they arrived as payment for a service in convertible foreign exchange. That proof is the FIRC tied to a services purpose code. A creator who received the money but logged it as a gift has the dollars and none of the proof, which is the worst of both worlds: the income is real and taxable, the exemption is gone, and the only fix is a slow, manual scramble to get the bank to reclassify after the fact.
What SutraOS does about this
So much of this comes down to a handful of decisions you make the moment money lands — and getting them right is mostly about knowing the rule before the bank's dropdown asks. That's where SutraOS exists to help: making clear what a foreign payment actually requires — the right classification, the certificate to ask your bank for, the trail to keep — so an exemption you've earned doesn't quietly evaporate on a mislabelled transfer.
Cross-border is where the creator economy is heading, and being ready to support global-brand-to-Indian-creator deals — cleanly and compliantly — is squarely on us as the platform matures. SutraOS exists so you can take that growth without inheriting a paperwork problem you never signed up for.
If you're a creator working with international brands and the “lost the export exemption on a dropdown” story is one you'd rather avoid, SutraOS is live — create your free account and keep the paperwork straight from day one. Working through an agency? Send them this too; we're also taking on 3–5 agencies as design partners.
Ready to make this someone else’s problem?
SutraOS is live. You can sign up and set up your account today — self-serve, no waitlist — and run your first compliant campaign. Want it hands-on? The design-partner program adds white-glove onboarding for your first campaigns and direct input on the roadmap.
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