What is GST on Subscription Model?
Nexa Consultancy | Startup & Finance Glossary
GST is applicable on SaaS and other subscription services. The primary challenge is determining the Place of Supply to apply the correct tax (IGST for inter-state/export or CGST/SGST for intra-state).
Startup Example: An Indian SaaS startup sells a subscription to a customer in the US. This is considered an export of service and is a zero-rated supply. The startup can export without paying IGST by filing a Letter of Undertaking (LUT). For a customer in a different Indian state, the startup must charge IGST.
Navigating these scenarios is a core part of our GST compliance services.