How Indian SaaS Exporters Can Claim FIRA and GST Refunds (2025 Guide)

India's software-as-a-service (SaaS) market is projected to reach $50 billion in annual recurring revenue by 2030, nearly quadrupling its current size. While "India-first" companies like Perfios and M2P serve the domestic market, "global-first" companies like Zoho, Freshworks, and Icertis are winning clients worldwide.

If you're in the second category, building for international markets, two compliance areas directly impact your bottom line: ensuring compliant payment through proper FIRA documentation, and recovering funds through GST refunds on your business expenses.

This guide breaks down both processes for SaaS exporters in 2025.

What is FIRA, and Why Do SaaS Exporters Need It?

FIRA stands for Foreign Inward Remittance Advice (sometimes called by its old name, FIRC - Foreign Inward Remittance Certificate). Your bank or payment provider issues this document whenever foreign currency gets credited to your Indian account.

It is an official receipt that proves foreign money actually reached you. When your US client pays $5,000 for your annual software license, that payment doesn't just appear in your account - it goes through foreign exchange conversion, and your bank creates a paper trail.

Why FIRA matters for your business:

Obtaining FIRA documentation correctly is essential for meeting three key compliance requirements. 

In most cases, SaaS founders discover this requirement only when they try to claim their first GST refund and realize they're missing essential documentation. The key is to set up proper collection processes from day one, rather than scrambling to gather historical records later.

How to Get FIRA for Your SaaS Business? 

Your FIRA process depends on how you receive international payments, and each method has different requirements and timelines.

Traditional SWIFT bank transfers through banks like ICICI or HDFC will generate FIRA automatically, but you need to request copies from your bank. Most banks charge a small fee (typically ₹100-500 per document) for FIRA documents and may take 2-3 business days to provide them. While some banks may email these automatically, most require you to visit a branch or request them through internet banking.

Payment platforms like PayPal typically provide monthly digital FIRA statements that consolidate all your international receipts for that period. You'll need to download these from your PayPal business account and ensure they include all required details for GST compliance.

Specialised platforms like Skydo automatically generate FIRA for every individual transaction as soon as the payment is processed. This real-time approach eliminates the waiting period and manual requests that come with traditional banking.

Essential FIRA details to verify:

Regardless of your payment method, every FIRA document must include: 

Missing any of these details can delay the processing of your GST refund, so always verify the completeness of your claims before filing.

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GST Refunds for SaaS Exporters: What You Need to Know

The Indian GST system treats SaaS exports as zero-rated supplies under Section 16 of the IGST Act, which means you charge 0% GST to your international clients. However, you're still required to pay GST on business inputs, such as office rent, software subscriptions, and professional services.

This creates a cash flow situation where you're paying GST on your costs but not collecting it from your revenue. The government recognizes this imbalance and provides two options for handling GST on exports.

Option 1: Pay GST first, then claim a refund 

You can pay the full 18% GST on your export invoices and then file for a complete refund later. While this guarantees you'll get your money back, it ties up significant working capital that most growing SaaS companies can't afford to lock away.

Option 2: Letter of Undertaking plus input tax credit refund 

Most SaaS exporters choose this route because it's more cash-flow friendly. You file a Letter of Undertaking (LUT) that allows you to export without paying GST upfront. Then you claim refunds only for the input tax credit (ITC) you've paid on business expenses.

Here's how it works practically: if you paid ₹50,000 in GST this quarter on your office rent, software tools, and legal fees, and 80% of your revenue came from international clients, you can claim a refund of ₹40,000 through the ITC route. This approach keeps your cash flowing while ensuring compliance.

Step-by-Step — How to Claim GST Refund on Export of Services

Even with LUT, SaaS exporters can claim refunds for unutilized Input Tax Credit. The process depends on which route you've chosen for handling GST on your exports.

If you export under LUT (without paying GST)

This is the preferred route for most SaaS companies because it preserves cash flow. You don't charge 18% GST on your international sales invoices, but you're still paying GST on domestic purchases, such as software subscriptions, office rent, and professional services. That input tax credit becomes your opportunity for a refund.

Steps to claim ITC refund:

If you didn't file LUT (export with payment of GST)

This route involves charging 18% GST on your export invoices, paying that GST to the government, then claiming a refund through RFD-01 (GST refund application form). While you can recover the full GST amount, this approach ties up working capital that most growing SaaS businesses prefer to keep liquid.

Most SaaS exporters avoid this route specifically because it creates unnecessary cash flow constraints during periods of growth.

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Common Mistakes SaaS Exporters Make (And How to Avoid Them)

Most GST refund delays occur due to preventable documentation and process errors. Here are the mistakes that consistently trip up SaaS exporters, along with tips on how to avoid them.

Not collecting valid FIRA documents 

Many founders assume their bank statements or payment confirmations are enough, but GST authorities specifically require FIRA or FIRC documents. Without proper FIRA, your entire refund application becomes ineligible, regardless of how perfect your other documentation is.

Set up a system to collect FIRA within 10 days of receiving each international payment. Some banks provide these automatically, while others require manual requests. Alternatively, services like Skydo offer free and instant FIRA with every transaction, eliminating the hassle of collection. Don't wait months to gather these documents - banks have retention policies, and older records become harder to obtain.

Using incorrect purpose codes 

Your FIRA must show the right purpose code for software exports, typically P0802. If your bank assigns a generic code or marks it incorrectly, you may experience verification delays during refund processing. Inform your bank about the nature of your business upfront and verify the purpose code on each FIRA before accepting it.

Missing LUT renewals 

LUT expires every financial year and must be renewed. Exporting without a valid LUT means you should have charged GST on those invoices. If you discover this mid-year, you'll need to either pay GST retrospectively or face compliance issues during refund applications.

Export invoice format errors 

Your international invoices need specific GST formatting, including the place of supply marked as outside India, GST rate clearly shown as 0%, LUT reference numbers, and a proper description of software services. Generic invoices without these details get rejected during refund verification.

Filing delays and mismatched returns 

Late GSTR-1 filing or discrepancies between your export invoices and return data create processing delays. GST authorities cross-verify your refund claims against filed returns, so ensure your export turnover figures match exactly across all documents.

Skydo Tip: Simplify FIRA + Export Payments in One Place

Managing FIRA collection and international payments doesn't have to be a challenge. If you're tired of chasing banks for FIRA documents or losing money to hidden FX markups, specialized platforms can streamline your entire export payment process.

Skydo helps you in the following ways:

For SaaS exporters dealing with regular international payments, this approach eliminates the documentation delays that often slow down GST refund applications. When your FIRA arrives instantly with every payment, you can file refund claims promptly rather than waiting weeks to gather missing documents.

The time savings alone - not having to chase banks for FIRA or worry about incorrect purpose codes - often justify the switch for growing SaaS businesses focused on scaling rather than managing payment paperwork.

Try Skydo if your SaaS clients are abroad and you want to save time and money on every payment while maintaining seamless GST compliance.

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Conclusion

For Indian SaaS exporters, managing foreign payments isn't just about getting paid—it's about staying compliant and reclaiming what you deserve.

FIRA documentation ensures RBI and GST compliance while protecting your refund eligibility. GST refunds bring back the input tax credits you've paid on business expenses, improving your cash flow significantly.

The key is to set up proper processes from day one, rather than scrambling to fix compliance gaps later. Whether you handle payments through traditional banks or specialized platforms like Skydo, focus on complete documentation and timely filing.

Get your FIRA collection right, maintain clean GST records, and claim those refunds—it's money you've already earned.