Query Regarding GST, ITR Reporting, and Books of Account for Export of Services

[Vineet Kumar]

I am providing export of software development services to a client in the United States and have a few queries regarding GST and income tax compliance.

I provided services for the month of March 2026 and raised an invoice in USD on 31 March 2026. I reported this invoice in GSTR-1 on 5 April 2026, using the applicable RBI exchange rate for GST purposes.

The payment for this invoice was credited to my bank account on 24 April 2026.

While filing my Income Tax Return (ITR) for FY 2025-26, I noticed that the Annual Information Statement (AIS) reflects the turnover reported under GST, which includes the value of this March 2026 invoice.

My question is: since the payment for this invoice was actually received in April 2026 (FY 2026-27), should I include this March invoice as income in my ITR for FY 2025-26, or should it be reported in FY 2026-27 when the payment was received?

I also have a question regarding the maintenance of books of account. At present, I maintain only:

• The invoices issued to my client, and
• The FIRC/Bank advice received for inward remittances.

I have no employees or business partners and operate as an individual consultant. Is this sufficient, or am I required to maintain additional books of account? If so, what records should I maintain? Would you recommend using accounting software, or is maintaining proper records in Excel acceptable for a business of my size?

AI Summary

Consistent accounting for exported software services supports GST-income tax reconciliation, while invoices, remittance evidence and delivery records strengthen compliance.
Income-tax books may be maintained on either cash or accrual basis, but the chosen method should be applied consistently. Where an export invoice has been reported for GST on an accrual basis, the same basis for income-tax reporting is advised to facilitate reconciliation with GST turnover. Records should include invoices, inward-remittance evidence, contracts or work orders, and proof of service delivery. Foreign-exchange receipt timelines, applicable SOFTEX or export declaration reporting, and FEMA-related compliance should be observed. A change in accounting method requires reasonable justification and may attract scrutiny.