Quick answer: Yes, if you are GST-registered, use the software in your business and hold a valid tax invoice. An invoice from an Indian entity shows GST, and you claim it once it appears in GSTR-2B. A foreign vendor usually charges no GST after it has your GSTIN, so you pay IGST yourself under reverse charge and claim it in GSTR-3B Table 4(A)(2). Add your GSTIN to every subscription, from Zoho Books to Google Workspace.
How we researched this: We read the CGST Act (section 16) and IGST Act (section 5) on the CBIC tax repository, Notification 10/2017-Integrated Tax (Rate), the CBIC OIDAR flier, GSTN's GSTR-2B and GSTR-3B help pages, and vendor tax pages from Google, Zoom, HubSpot, Figma and Zoho. Rules and prices are as published in October 2026; confirm with your CA before filing.
How to claim GST input tax credit on SaaS: the two lanes
Every software subscription falls into one of two lanes, and the invoice in your inbox tells you which.
| Lane 1: Indian-entity invoice | Lane 2: foreign vendor, no GST charged | |
|---|---|---|
| Example | Zoho or Google Workspace billed through an Indian entity | Zoom billed in a non-INR currency, per Zoom's India page |
| GST on the invoice | Yes, CGST+SGST or IGST | No, once a valid GSTIN is on the account |
| Who pays the tax | The vendor collects it from you | You, under reverse charge |
| Where credit is claimed | From GSTR-2B into GSTR-3B | GSTR-3B Table 4(A)(2) and Table 3.1(d), entered directly |
| Biggest risk | Vendor has your GSTIN wrong, or the invoice never reaches GSTR-2B | You never self-assess, so tax and credit are both missed |
Government sources set the rules for both lanes; vendors only show how they bill. The legal base is section 16 of the CGST Act, which says every registered person is entitled to take credit of input tax on supplies "used or intended to be used in the course or furtherance of his business".
Lane 1: GST tax invoice on SaaS subscription
Section 16(2) lists the conditions. Paraphrased from the statute text on the CBIC repository:
- You hold a tax invoice or debit note issued by a registered supplier (clause a).
- The supplier has furnished the invoice details in its outward supplies statement and they have been communicated to you (clause aa).
- You have received the goods or services (clause b). For a subscription that means the service is available to you.
- The tax charged has actually been paid to the Government (clause c).
- You have filed your return under section 39 (clause d).
Rule 46 of the CGST Rules decides what a tax invoice must carry. Beyond the supplier's name, address and GSTIN, it requires a consecutive serial number, the date, the recipient's name, address and GSTIN if registered, an HSN/SAC code, a description, taxable value, rate and amount of tax, place of supply for inter-State supplies, and whether tax is payable on reverse charge. Without your GSTIN on it, the invoice will not sit against your registration, and Google's own help page warns you may not be able to claim credit for taxes paid.
So the practical job is to put your GSTIN into each vendor's billing profile before the first invoice:
- Google Workspace: Google's help page says GSTINs are mandatory for Business accounts, that you can add several to your payments profile, that each GSTIN's state must match the state in the bill-to address (otherwise it is treated as if no GSTIN was provided), and that additional GSTINs apply only to future billing cycles. It states that the rate on Google's services is 18% where integrated tax applies.
- Figma: if the team's address is in India, GST is added to your purchase until a valid GSTIN is provided; on request it may refund GST on invoices issued in the 30 days before the GSTIN was supplied, and none beyond that. The lesson: a delay of one billing cycle can cost a month's credit, so add the GSTIN at signup.
Make sure the invoice reaches your GSTR-2B
GSTN describes GSTR-2B as an auto-drafted, read-only ITC statement generated for each registered person, produced on the 14th of the following month for monthly filers. Table 3 Part A lists credit you may claim, and Table 4 lists credit that cannot be claimed, such as time-barred credit under section 16(4). Reconcile the statement against your books each month; a SaaS invoice missing from 2B means the vendor has not reported it or reported the wrong GSTIN. Our GSTR-2B reconciliation software guide lists tools, and filing GST returns straight from billing data shows the workflow.
The deadline most people miss
Section 16(4) bars credit on any invoice after the thirtieth day of November following the end of the financial year to which the invoice pertains, or the furnishing of the annual return, whichever is earlier. An invoice from April 2026 (FY 2026-27) must therefore be claimed by 30 November 2027 at the latest. GSTR-2B puts time-barred items under "ITC not available".
GST on foreign SaaS reverse charge: Lane 2
When a vendor outside India sells you software, three government sources fit together.
- The charging provision. Section 5(3) of the IGST Act lets the Government notify categories of supply on which the recipient pays tax under reverse charge. Notification 10/2017-Integrated Tax (Rate), serial 1, covers "any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient", with the recipient being "any person located in the taxable territory other than non-taxable online recipient".
- The OIDAR connection. The CBIC's OIDAR flier explains that online information and database access or retrieval services include cloud services, software and digital data storage delivered over the internet. It says that where the supplier is outside India and the recipient is a registered business in India, the reverse charge mechanism applies and the Indian recipient pays GST and handles compliance. A "non-taxable online recipient" is, broadly, an unregistered person or government body receiving the service for non-business purposes.
- The return. GSTN's GSTR-2B page says "reverse charge credit on import of services is not a part of this statement"; it is entered directly in GSTR-3B, in Table 4(A)(2) for the credit and Table 3.1(d) for the liability.
Foreign vendors that follow this model, such as Zoom, say that when you choose a non-INR billing currency the supply comes from ZVC Inc., which is registered in India under OIDAR, does not charge Indian GST to customers with a valid GST registration number, and notes that business customers "may be required to self-account for GST under the reverse charge mechanism". Figma uses similar wording: with a valid GSTIN no GST is charged, though you may need to report the purchase through reverse charge. The vendor will not remind you to self-assess; your accountant must.
A worked illustration, with assumed numbers: suppose a month's foreign invoice converts to ₹10,000. At 18% IGST, you record a ₹1,800 reverse-charge liability and claim ₹1,800 as credit if the service is for business. Ask your CA how to value the supply, how to document it and how the liability is paid; those mechanics depend on your return profile. Our companion piece on GST on foreign SaaS under reverse charge goes deeper on the foreign-vendor lane.
What you cannot claim
Section 16(1) refers to a registered person, so an unregistered business has no credit to claim. Section 17(5)(g) blocks credit on goods or services "used for personal consumption", so a founder's personal streaming or a family cloud-storage plan billed to the company fails the test. For mixed-use tools, keep a usage note and let your CA decide on apportionment. The statute gives no free pass for "small" amounts.
SaaS software pricing in INR rupees: reading a price page
A price in rupees is only half the answer, because Indian price pages usually exclude tax. Zoho Books' India plans page lists Standard at ₹749 per organisation per month billed annually (₹899 billed monthly), Professional at ₹1,499 (₹1,799), Premium at ₹2,999 (₹3,599), Elite at ₹4,999 (₹5,999) and Ultimate at ₹7,999 (₹9,599), with the note that prices are exclusive of local taxes. Users per plan run from 3 on Standard to 25 on Ultimate.
Take Standard billed annually: ₹749 × 12 = ₹8,988. The government's rate notification 11/2017-Central Tax (Rate) lists Heading 9984 (telecommunications, broadcasting and information supply services) at 9% central tax, which with an equal state tax or as IGST gives 18%; your invoice shows the rate that applies to you. At 18%, GST is ₹1,617.84 and the invoice total is ₹10,605.84. If every rupee of that GST is eligible credit, your net cost is the ₹8,988 list price, which is why SaaS priced in rupees helps: no exchange-rate drift, and an Indian-entity invoice that flows into GSTR-2B. A USD price with reverse charge reaches the same net cost, but you carry the compliance and the foreign-exchange change.
A monthly routine for a 25-person business
A Pune distributor with a dozen subscriptions can run this in an hour a month:
- List each subscription: vendor, entity name on the invoice, billing currency, GSTIN on file.
- Mark each one Lane 1 or Lane 2.
- After the 14th, open GSTR-2B and tick Lane 1 invoices; chase any missing vendor.
- For Lane 2, compute the reverse-charge liability and enter it in Table 3.1(d) and 4(A)(2).
- Before 30 November each year, sweep for unclaimed invoices of the previous financial year.
- Route new tools through an approval step; see software buying approval workflow and SaaS spend and shadow IT tools.
Documents to keep for each subscription
Credit is only as safe as your paper trail. For every SaaS vendor, keep the vendor's invoice PDF, proof of payment, a screenshot of the matching GSTR-2B line (Lane 1) or your reverse-charge working (Lane 2), and a one-line note on business use. If a vendor changes its billing entity, say from an Indian company to a foreign one after a currency switch, note the date, because the lane changes with it and so does where you claim credit. A CA reviewing your return at year end should be able to follow the trail from invoice to Table 4 without a phone call.
Accounting tools such as Zoho Books, ClearTax GST and GSTZen can reconcile and report, and Zoho Expense or another expense management tool helps catch card-paid subscriptions. Browse GST software and accounting software for options. Check also expense management software in India.
FAQs
How do I claim GST input tax credit on SaaS?
Hold a tax invoice with your GSTIN, make sure the vendor's invoice appears in your GSTR-2B, and claim it in GSTR-3B for the period. Under section 16(4), do it before 30 November after the financial year ends.
What should a GST tax invoice on a SaaS subscription contain?
Rule 46 requires the supplier's GSTIN, a serial number, date, your name, address and GSTIN, an HSN/SAC code, description, taxable value, tax rate and amount, and place of supply for inter-State supplies.
Do I pay GST on foreign SaaS under reverse charge?
Yes, as a registered business recipient. Notification 10/2017-Integrated Tax (Rate) puts the tax on the recipient for services from outside India. You report it in GSTR-3B and, if eligible, claim the credit in Table 4(A)(2).
Is a free trial or a personal-card SaaS purchase eligible?
Only if you hold a valid tax invoice in your company's GSTIN and the tool is for business use. Personal consumption is blocked under section 17(5)(g).
Can I fix a missing GSTIN on an old invoice?
Vendors differ. Google applies added GSTINs only to future billing cycles; Figma may refund GST charged in the 30 days before the GSTIN was provided. Ask the vendor's billing team early.
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