Foreign brand deals and platform earnings: GST, tax and FEMA basics

Overseas income is part of the picture

Many creators now work with brands abroad or earn from global platforms. These receipts raise three separate sets of questions: income tax, GST and foreign exchange rules under FEMA. The answers depend on where you live, who pays you, what you provide and how you are paid.

Income tax

A person who is resident in India is generally taxed on income from all sources, whether earned in India or abroad. Fees from foreign brands and payouts from platforms are therefore normally included in your income, usually as business or professional income. Residential status depends on the days spent in India in the relevant years and other conditions, and it should be checked rather than assumed.

Some foreign payers or platforms withhold tax under their own country’s rules. Where tax has been paid abroad, relief may be available through a tax treaty or foreign tax credit, subject to conditions and to the required forms and documents being filed. Please keep the withholding statements and certificates the payer issues.

GST on services to clients abroad

Under the IGST Act, a service can qualify as an export of services only if all the stated conditions are met. In summary, the supplier is in India, the recipient is outside India, the place of supply is outside India, the payment is received in convertible foreign exchange (or in rupees where the RBI permits), and the supplier and recipient are not merely establishments of the same person.

A qualifying export is a zero-rated supply. This generally allows you to supply without paying IGST under a Letter of Undertaking, or to pay IGST and claim a refund. Zero-rated is different from exempt, because it does not block input tax credit. Whether a service is an export can depend on the place of supply rules for that service, so each arrangement should be reviewed.

Do you need GST registration for exports?

Exports count towards aggregate turnover. Registration is generally linked to the turnover threshold, and many exporters choose to register voluntarily so that they can file a Letter of Undertaking and claim refunds of tax on their costs. Whether this makes sense depends on your costs and the volume of your exports.

FEMA basics

The Foreign Exchange Management Act governs how foreign exchange is received and held. For exports of services, the proceeds are generally expected to be realised and repatriated within the period prescribed by the Reserve Bank of India. Payments are normally received through authorised banking channels, and the bank can issue the documents that evidence the receipt. Keeping the invoice, contract and bank advice together makes later reporting easier.

Foreign assets and accounts

Resident taxpayers who hold foreign bank accounts or other foreign assets may have separate disclosure requirements in their return. If you receive money into an account outside India, or hold shares or other assets abroad, please raise this early.

Practical checklist

• Keep contracts and invoices that show who the recipient is and where it is located
• Receive payments through authorised channels and keep the bank advice
• Record any tax withheld abroad, with the payer’s statement
• Review whether GST registration and a Letter of Undertaking would help
• Tell your adviser about any foreign accounts or assets

These rules interact, and small differences in facts can change the result. A short confidential discussion can help you apply them to your own arrangements.