I went into our pricing database expecting a boring answer. We track the plan-by-plan cost of a large catalog of software, and I wanted to know a simple operational thing: when an Indian company pays for these foreign tools, how many of them hand over a proper GST invoice, the kind your accountant can actually use?
I could confirm the answer for 120 dollar-billed tools. Eight of them issue an Indian GST invoice. The other 112 do not.
That number bothered me enough to go figure out why, because at first it reads like a catalogue of vendors being sloppy about India. It isn't. The missing invoice is not an oversight. It is written into how the tax works, and once you see it, a specific and recoverable amount of money falls out of the gap.
The reason 93% of them don't invoice you
When a foreign company sells you software, India's GST rules split into two worlds depending on who you are.
If you are an individual or an unregistered business with no GSTIN, you fall under the OIDAR rules. The overseas vendor is supposed to register in India and charge you 18% GST at checkout. Some of the big ones do, which is why you occasionally see GST on an Adobe or a Microsoft receipt. Plenty of smaller tools quietly don't, which is a grey area nobody enforces.
If you are a registered business, and most companies past a modest turnover are, none of that applies. Your purchase is an import of a service, and it moves to the Reverse Charge Mechanism. The vendor is explicitly not meant to charge you Indian GST or register for you. Instead the law hands the whole obligation to you: you self-account for the 18% IGST, you pay it, and you claim it back.
So the foreign vendor has no reason, and often no legal basis, to give you an Indian GST invoice. The 93% is not vendors ignoring India. It is the tax system deciding that the paperwork is your job, not theirs. The eight that do issue one are mostly the large players who registered here for their consumer business and never turned it off for B2B.
This matters because of what most finance teams do next, which is nothing.
The part that actually costs money
Reverse charge is not optional. That is the sentence I wish someone had put in front of me earlier.
People hear "you claim the GST back" and assume the worst case is a wash. It isn't. Under reverse charge you are legally the one who owes the 18% to the government on that foreign subscription. You raise a self-invoice for the import (the vendor gives you none, so you generate the document yourself), you declare and pay the IGST in your monthly GSTR-3B, and in that same return you claim the identical amount as input tax credit. Filed correctly, month after month, it nets to zero.
Skip it, and you have not saved anything. You have created a liability. The tax was due whether or not you filed it, so an audit can come back for the unpaid IGST plus interest, and separately you have forfeited the input credit you were entitled to. It is the rare case where doing nothing is worse than doing it right and worse than not buying the tool at all.
The trap is that this looks invisible on a bank statement. Your card gets charged $250, the money leaves, the tool works. There is no invoice arriving in your inbox to trigger the accounting entry, because the vendor never sends one. Unless someone on your side is specifically treating foreign software as an import of service and generating the self-invoice, the whole reverse-charge cycle silently doesn't happen. For a lot of startups it doesn't, because the CA is applying reverse charge to obvious things like import of goods and freight, and a Figma subscription doesn't look like an import to anyone.
That is 18% of your entire foreign software spend, sitting in a state where it is either an unclaimed credit or an open liability, depending on how unlucky you get.
What the two prices actually are
Once you fold in the card forex markup as well, the same tool has two honest prices in India, and they are far apart.
A registered business that files reverse charge properly pays about 3.5% over the mid-market sticker. That 3.5% is the card's currency-conversion markup, which nobody gets back, and 18% GST is even charged on the markup itself. Small, annoying, unavoidable.
A business that cannot reclaim the GST, or simply doesn't, pays about 22% over the sticker once the full 18% lands on top of the forex.
The 22% is the number to sit with. On a foreign software line of a few lakhs a year, that is tens of thousands of rupees that bought nothing. It is forex plus a tax you were carrying without knowing it.
The premium is ugliest on the usage-billed tools, because there the percentage rides on top of a bill that scales with your traffic. In our numbers the worst monthly gaps were exactly those: a large WooCommerce setup, PostHog, Mixpanel. A flat $10 seat is a rounding error. A metered analytics or e-commerce bill at scale is where the India tax quietly turns into real money.
The forex line, since we're here
Two specific things, because they are cheap wins and almost nobody uses them.
Most credit cards charge a cross-currency markup of 1.5% to 3.5% on foreign transactions. Several Indian banks and fintechs now issue zero-forex-markup cards. If your dollar spend runs into lakhs, moving those charges to a zero-forex card removes that slice entirely, and it applies to every foreign charge you will ever make, not only software.
The second one catches people at checkout. If a foreign vendor's payment screen offers to bill you in INR instead of its own currency, decline it. That is dynamic currency conversion, and the rate baked in is reliably worse than letting your own card do the conversion. Always pay in the vendor's currency.
What I'd actually do with this
If you are registered, the highest-value action on this entire list is a single conversation with whoever does your GST returns: "are we applying reverse charge and claiming input tax credit on our foreign software subscriptions, with self-invoices?" If the answer is a pause, you have found the money. It is procedural, not clever, and it recovers 18% of a spend you were treating as sunk. I am a developer, not a chartered accountant, so pin the exact mechanics to your own situation, but that is the question that pays for itself.
If you are not registered and your foreign SaaS spend is meaningful, the reclaimable 18% is a real part of the case for registering, sitting next to whatever else pushes you over the line.
And whichever you are, budget the real number, not the sticker. A foreign SaaS pricing page is written for an American buyer. For an Indian business it is missing a forex layer and a tax layer, and the vendor has no incentive to add them for you.
I priced every foreign tool in our catalogue this way, including which of them actually issue a GST invoice you can reclaim against, and where an India-billed alternative exists that skips the forex layer entirely. The invoice check was the one that surprised me. Eight out of a hundred and twenty.
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