Do I need to report my foreign income in my GST return?

GST GSTR Filing
1

I sell print-on-demand products on Redbubble and Teepublic, and I get paid through PayPal in foreign currency. Basically, I sell t-shirt designs; it’s like selling digital products.

Recently, I registered for GST in India as a sole proprietor because I’m starting to sell on Flipkart and Amazon India.

My question: Do I need to include my foreign earnings in my GST return? Or can I keep them separate since that income has nothing to do with my Indian business?

If I do need to include them, I receive payments after the 16th of the following month (for example, January’s payment arrives in February after the 16th). By then, the due date for GSTR-1 has already passed. I can only get a rough idea of how much I will be paid because of currency rate fluctuations.

Thanks

2

Hello @Mahendra,

Welcome to the community!

Foreign earnings is considered as a export of services and are considered as zero rated supply (if applied for LUT) and this needs to be included in the GST return.

In your case the services rendered in month of January needs to be considered in the GST return of January even though it has been actually credited in February month. Also, the conversion rate of January month when the invoice has been raised needs to be considered.

Hope this helps!

1 Like
3

Thanks for the input!

I understand the point about the service period, but I was planning to use the invoicing provisions to align the reporting with the actual payment receipt. This helps me avoid estimation errors due to exchange rate fluctuations.

Based on my research, here is my thought process

  • The Law (Section 13(2) of CGST Act): The ‘Time of Supply’ for services is the Date of Invoice, provided the invoice is issued within the prescribed period.

  • The Prescribed Period (Section 31(2) of CGST Act + Rule 47): A registered person has 30 days from the supply of service to issue a tax invoice.

Timeline

  • Service Period: Jan 1 – Jan 31.

  • Legal Deadline to Invoice: March 2nd (30 days after the completion of service).

  • My Action: Issue the invoice on Feb 15th (when the actual payment arrives).

  • Result: Since Feb 15th is within the 30-day allowed window, Feb 15th becomes the legal ‘Time of Supply’.

This would mean the liability arises in February, and I can report it in the February return (filed in March) with the exact INR figures.

Does this interpretation seem valid?

4

Since the services were actually provided in January, the supply clearly belongs to the January tax period. Raising the invoice in February doesn’t alter the period of supply.

So, the transaction should be reported in the January GST return. If there are any differences due to foreign exchange fluctuations, those can be adjusted in later GST returns. Practically speaking, the GST department looks at the substance of the transaction (when the service was rendered) rather than the invoice date, and expects it to be reported in that period.