Indian recruitment agencies and RPO (recruitment process outsourcing) providers that bill clients abroad are service exporters, so their foreign invoices go on the monthly Export Declaration Form. One EDF covers every export invoice dated in a month and is due within 30 days from the end of that month, filed with the AD bank that receives your payments. Recruitment billing has quirks that other sectors do not, especially success fees and replacement guarantees, and these need careful handling so your EDPMS entries match reality.
Key takeaways
- Placement fees, RPO management fees and per-hire charges are each declared when invoiced, in the month of the invoice date.
- Sourcing and screening delivered remotely means "Internet" at field 1.4 for most firms.
- Replacement guarantees and fee refunds should be handled with credit notes linked to the original invoice.
- Codes for recruitment services are not in the common IT lists; confirm SAC with your CA and purpose code with your bank.
- Check the intermediary question with your CA before treating every recruitment invoice as a zero-rated export.
How recruitment firms bill foreign clients
| Model | What the client pays for | When you invoice | EDF row |
|---|---|---|---|
| Contingent placement | A successful hire | On offer acceptance or joining, per contract | One row per placement invoice |
| Retained search | A senior search engagement | Staged: on signing, shortlist and completion | One row per stage invoice |
| RPO management fee | Running all or part of the client's hiring | Monthly | One row per month |
| RPO per-hire fee | Each hire delivered under the RPO | Monthly batch or per hire | One row per invoice |
| Sourcing-only / research | Candidate pipelines, market maps | Per project or monthly | One row per invoice |
The rule never changes: the invoice date sets the EDF month. If you invoice a placement fee on 4 November for a candidate who accepted on 29 October, it goes on the November EDF, due 30 December 2026.
Replacement guarantees and refunds
Most placement contracts promise a free replacement or a partial refund if the hire leaves within a guarantee period. That creates a gap between the invoice you declared and the money you finally keep.
- Free replacement: no change to the invoice; you deliver another candidate. Nothing changes on the EDF.
- Partial refund before payment: issue a credit note against the original invoice, and tell the bank that realisation will be the reduced amount.
- Refund after payment: you received full value and later paid some back. Talk to your AD bank about how it wants this recorded, and see our article on refunds to foreign clients after filing the EDF.
In every case, keep the credit note, the client's email and the guarantee clause together. A credit note that references the original invoice number is the cleanest evidence.
Codes, hedged
SAC. Recruitment and executive search services have their own classification under GST, separate from the IT and consulting codes most exporters know. We do not list a specific code here; ask your CA to confirm the right one for placement, RPO and research work, and use it consistently on invoices and in the EDF's SAC column.
Purpose codes. Banks classify each inward remittance. Recruitment fees may not fit neatly under consulting codes such as P1006 (business and management consultancy). Tell your bank what the payment is for and check the code on each FIRA. If it is wrong, fix it early.
The intermediary question
GST treats "intermediary services", arranging or facilitating a supply between two other parties, differently from a service you supply on your own account, and intermediary services may not qualify as exports. Most recruitment firms supply their own service to the client: they search, screen and present candidates for a fee. But some arrangements, especially where you act for a foreign agency placing candidates with another business, need a closer look.
Before you rely on zero-rating for an unusual contract, ask your CA to review it. Our guide to intermediary services and GST explains why this matters. The EDF itself does not decide GST treatment; it is a FEMA declaration.
Worked example: an RPO month
Northstar Talent Partners LLP, a Noida firm, runs RPO for a UK fintech and does contingent hiring for two US companies. In October 2026 it invoiced:
| Row | Client | Invoice | Date | Description | Amount |
|---|---|---|---|---|---|
| 1 | UK fintech | NTP/RPO/0610 | 1 Oct | RPO management fee, October | GBP 8,500 |
| 2 | UK fintech | NTP/RPO/0611 | 1 Oct | Per-hire fees, September: 7 hires at GBP 900 | GBP 6,300 |
| 3 | US SaaS company | NTP/PL/0233 | 12 Oct | Placement fee, senior engineer | USD 14,400 |
| 4 | US logistics company | NTP/PL/0234 | 26 Oct | Placement fee, operations lead | USD 9,600 |
The October EDF had four rows, due 30 November 2026. Two designated partners are authorised; one signed using "We" in the declaration.
In December, the operations lead from row 4 resigned within the guarantee period, and the contract allowed a 50% refund if no replacement was found within 60 days. None was found. Northstar issued a credit note for USD 4,800 against NTP/PL/0234 and wrote to its bank explaining that realisation on that invoice would be USD 4,800. Because the client had not yet paid, the bank could match the reduced payment to the invoice and the credit note together.
Field-level notes for recruiters
- 1.1 Type of export: Services.
- 1.4 Mode of delivery: Internet, for remote sourcing and screening. If your team works on-site abroad, ask your bank.
- 1.12 Mode of realisation: usually "Others" for direct transfers.
- 1.21 Description: keep it generic, such as "Recruitment services, October 2026". Never include candidate names or personal data on the EDF or invoices.
- Part 2B remarks: note guarantee terms if they could change the realisable amount.
Each invoice must be realised within 9 months of its date (12 months for rupee invoices). This is general information, not legal or tax advice.
Frequently asked questions
When do I declare a placement fee on the EDF?
In the month the placement invoice is dated. If your contract says you invoice on the candidate's joining date, the invoice and the EDF month follow that date, not the offer date.
How should a refund under a replacement guarantee be shown?
Issue a credit note against the original invoice and inform your AD bank, with the guarantee clause and client correspondence. If you have already been paid and later refund, ask the bank how it wants the outward payment documented.
Are recruitment services always zero-rated exports for GST?
Not automatically. They must meet the Section 2(6) IGST conditions, and some arrangements could be treated as intermediary services. Ask your CA to review contracts where you act between two other parties.
Can I include candidate details in the EDF description?
No. Describe the service at a general level, such as "Recruitment services" or "RPO management fee". Personal data does not belong on the EDF, invoices or bank letters.
Bottom line
For recruitment and RPO firms, the EDF is easy to file and easy to get slightly wrong, usually at the refund-guarantee stage. Link every credit note to its invoice and tell the bank early. Prepare your monthly declaration with our free EDF form generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.