The latest articles on DEV Community by Arjit (@arjitjindal). https://dev.to/arjitjindal https://media2.dev.to/dynamic/image/width=90,height=90,fit=cover,gravity=auto,format=auto/https:%2F%2Fdev-to-uploads.s3.us-east-2.amazonaws.com%2Fuploads%2Fuser%2Fprofile_image%2F737897%2Fd21922a3-9933-4c27-8fbb-e91dd255215e.png https://dev.to/arjitjindal en Arjit Sat, 18 Jul 2026 17:15:15 +0000 https://dev.to/arjitjindal/the-india-software-tax-forex-gst-and-what-saas-really-costs-3b6l https://dev.to/arjitjindal/the-india-software-tax-forex-gst-and-what-saas-really-costs-3b6l <blockquote> <p>A data study from <a href="https://findthatsoftware.com" rel="noopener noreferrer">FindThatSoftware</a>, an India-first software-decision platform. Live, per-tool numbers are in the <a href="https://findthatsoftware.com/reports/the-india-software-tax" rel="noopener noreferrer">original report</a>.</p> </blockquote> <h2> The price on the pricing page isn't what an Indian buyer pays </h2> <p>If you run a business in India and pay for SaaS, the sticker is a lie of omission. But the size of the gap depends on one thing most write-ups skip: <strong>whether you can reclaim GST.</strong> There are really two India taxes, and they hit different buyers.</p> <h3> 1. The forex markup — real, and nobody escapes it </h3> <p>When your Indian card pays a dollar charge, it converts at roughly the mid-market rate <strong>plus ~3.5%</strong>. This is not reclaimable — not even for a GST-registered business. On dollar-billed tools, this is the true, unavoidable India premium.</p> <h3> 2. 18% GST — conditional, not a flat add-on </h3> <p>Business software attracts 18% GST, but:</p> <ul> <li>A <strong>GST-registered business reclaims it</strong> as input credit. Foreign B2B is <strong>reverse-charged</strong>, so the overseas vendor bills no GST at all — you self-account and reclaim it. Net effect: ~zero.</li> <li>Only an <strong>unregistered buyer</strong> (or a GST-exclusive price with no reclaim) actually bears the +18%.</li> <li>Some Indian vendors already <strong>include</strong> GST in the sticker.</li> </ul> <h2> A worked example </h2> <p>A $50/month tool, at ₹86 to the dollar:</p> <div class="table-wrapper-paragraph"><table> <thead> <tr> <th>Buyer</th> <th>What they pay</th> </tr> </thead> <tbody> <tr> <td>Mid-market conversion</td> <td>₹4,300</td> </tr> <tr> <td> <strong>Registered business</strong> (forex only, GST reclaimed)</td> <td><strong>~₹4,450/mo</strong></td> </tr> <tr> <td>Can't reclaim GST (forex + 18%)</td> <td>~₹5,250/mo</td> </tr> </tbody> </table></div> <p>So the premium is <strong>~4% for a registered business</strong> and <strong>~22% if you can't reclaim GST</strong> — not a flat 23% for everyone, which is what most "India software tax" takes get wrong.</p> <h2> Why it matters for India </h2> <ul> <li> <strong>Most SaaS bills in USD</strong>, so most Indian buyers pay the forex layer regardless of GST status.</li> <li>A <strong>rupee-billed local tool skips the forex layer entirely</strong> — often why the cheapest true cost in a category is an India-built product.</li> <li>When you compare tools, compare the <strong>real</strong> number for your situation, not the sticker. And check GST registration: it changes the maths.</li> </ul> <h2> See the full ranking </h2> <p>On FindThatSoftware we priced every tool the way an Indian buyer actually pays — forex-adjusted, GST reclaimed for a registered business — and ranked the cost by software function, with the "can't reclaim GST" figure alongside: <strong><a href="https://findthatsoftware.com/reports/the-india-software-tax" rel="noopener noreferrer">The India Software Tax</a></strong>.</p> india saas startup business