A foreign-currency export invoice still needs a rupee value for GST, and that conversion has to follow a consistent, defensible rate. For services, the CGST Rules (Rule 34, as currently worded) point to the exchange rate under generally accepted accounting principles on the date of the time of supply, which in practice usually means the rate your books apply on the invoice date. Use the same rate when you total the month on your EDF, and the two records will tell one story.
Key takeaways
- A dollar or euro invoice must show, or at least be recorded at, a rupee value for GST purposes.
- For services, the conversion follows accounting principles on the date of the time of supply; for most exporters this is the invoice-date book rate.
- Under LUT, no IGST is charged, but the rupee value still feeds your GST returns and any refund claim.
- If you export with IGST paid, the rate directly decides how much tax you pay and later reclaim.
- Keep the GST rupee value and the EDF rupee total on the same rate to avoid reconciliation headaches.
Why the rate matters even when no GST is charged
Export of services is a zero-rated supply under Section 16 of the IGST Act. Most exporters file a Letter of Undertaking, Form GST RFD-11, and invoice without IGST, adding the line "Supply meant for export under LUT without payment of IGST". It is tempting to think the rupee value no longer matters.
It does. Your export turnover in rupees goes into your GST returns, and if you claim a refund of accumulated input tax credit, the refund calculation is built on that turnover. An inconsistent rate across months distorts the numbers and makes your refund claim harder to explain. Our guide to reporting exports in GSTR-1 Table 6A shows where the rupee value ends up.
If you export with IGST paid instead of under LUT, the rate matters even more: it sets the rupee base on which IGST is calculated, and therefore the refund you later claim.
What the valuation rule says, in plain terms
Rule 34 of the CGST Rules deals with converting foreign-currency values. For services, it refers to the rate of exchange applicable under generally accepted accounting principles on the date of the time of supply. Put simply, your GST value should follow the same conversion your accounts use for that transaction on that date.
Time of supply for services has its own rules, and advances, delayed invoices and continuous supplies can shift the relevant date. For a straightforward export invoice raised on time, the invoice date is usually the anchor. If you receive advances or invoice late, ask your CA which date applies in your case.
The rule does not name a single published rate. That is why exporters use different sources, and why consistency matters more than picking any particular one.
Common rate sources, compared
| Rate source | Fits the accounting-principles test? | When it works well |
|---|---|---|
| Your accounting system's daily rate on invoice date | Yes, if applied consistently | Most exporters using Tally, Zoho or similar |
| A published reference rate on invoice date | Yes, if it is your accounting policy | Firms that want an external, verifiable source |
| Your bank's card rate on invoice date | Usually, if documented | Small businesses with one bank |
| Monthly average rate | Only if your accounting policy uses it | Businesses with many small invoices |
| Rate on the day payment arrives | Not for the invoice value | Records the realisation gain or loss later |
Whichever you use, write it down once as your policy and follow it for every invoice. Switching sources to get a better-looking number in a particular month is exactly what creates problems later.
Two worked examples: LUT and IGST paid
Under LUT
Pixelwise Studio LLP, a Chennai design studio, invoices a Dublin client EUR 4,000 on 9 November 2026 under LUT. Its books use a rate of 95.00 for that day (illustrative). The invoice shows EUR 4,000, the LUT line, and a rupee value of ₹3,80,000 with zero IGST.
The same ₹3,80,000 is reported as zero-rated turnover in Pixelwise's returns. When Pixelwise prepares its November EDF, due by 30 December 2026, this invoice is a Part 2B row in euros, and the rupee total in field 1.22 includes ₹3,80,000 on the same rate.
The client pays in January at a different rate. The difference is an exchange gain or loss in Pixelwise's books; neither the invoice nor the EDF changes.
With IGST paid
Suppose Pixelwise instead exported with IGST paid, and the service attracted IGST at 18% (confirm the rate for your service). The tax would be 18% of ₹3,80,000, which is ₹68,400, paid now and claimed back as a refund later. If the studio had carelessly used a lower rate of 93.00, the rupee value would drop to ₹3,72,000 and IGST to ₹66,960, and the invoice, return and refund would all carry figures that do not match its books.
Keeping GST and the EDF on the same page
Your GST invoice and your EDF are separate obligations under separate laws. The EDF is a FEMA declaration and does not change your GST position. But both describe the same export, and someone reconciling your records will compare them.
| Record | Currency shown | Rupee figure | Rate to use |
|---|---|---|---|
| GST export invoice | Foreign currency | Rupee value for GST | Invoice-date book rate |
| GST returns | Rupees | Zero-rated turnover | Same as invoice |
| EDF Part 2B | Foreign currency | Not needed per row | Not applicable |
| EDF field 1.22 | Rupees | Total of month's invoices | Same book rate |
If you use the same rate throughout, the EDF total for the month should equal the sum of the rupee values on that month's export invoices. Our article on the EDF total value in rupees covers the EDF side in more detail.
This is general information, not legal or tax advice. Valuation rules can be amended, so check the current rule text with your CA before you set or change your policy.
Frequently asked questions
Do I need to show the rupee value on a foreign-currency export invoice?
It is good practice to show both the foreign-currency amount and its rupee equivalent, because your GST returns are in rupees. Even under LUT, where no IGST is charged, the rupee value is what you report as zero-rated turnover.
Can I use the RBI or bank rate on the payment date for GST?
The payment-date rate is what your bank applies when it converts the money, and it determines your exchange gain or loss. For the GST value of the invoice itself, the rule looks to the accounting rate on the date of the time of supply, which is usually not the payment date.
Is the GST exchange rate the same as the customs rate?
For goods, customs notifies exchange rates that are used in certain valuations. For services, the GST rule refers to accounting principles instead. Unless your CA advises otherwise, service exporters generally follow their book rate.
What if I issue the invoice in rupees to a foreign client?
Then no conversion is needed for the invoice. Check with your CA that the rupee payment route meets the GST export conditions, which require payment in convertible foreign exchange or in rupees where RBI permits.
Should my EDF rupee total match my GST export turnover for the month?
If you use the same rate and the same set of invoices, it should match closely. Small differences can arise if one record includes an invoice the other does not, so reconcile them each month.
Bottom line
Pick one accounting-based rate, apply it to every export invoice on its invoice date, and carry the same figures into your returns and your EDF. Our export invoice generator helps you show the foreign-currency amount and the rupee value side by side from the start.
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.