Cloud consulting firms that migrate, build and run infrastructure for overseas clients declare those invoices on a single monthly EDF, filed with their AD bank, or with STPI where the work counts as software. The decisions specific to cloud work are three: whether to tick Software or Services, how to treat recharged cloud consumption, and how milestone retentions sit against the 9-month realisation window.
Key takeaways
- One EDF per month lists every export invoice: migration milestones, managed-service retainers and any usage recharges.
- If your work is software, you can file with your AD bank or STPI; both are specified authorities now. Other services go to the AD bank.
- SAC codes to discuss with your CA include 998313 (IT consulting and support), 998314 (IT design and development) and 998315 (hosting and IT infrastructure provisioning).
- Recharging a client's cloud bill is not obviously the same as exporting your own service. Get advice before you put it on the same invoice.
- Retentions held until acceptance can push realisation close to 9 months. Track them separately.
The shape of cloud consulting revenue
| Revenue line | How it is usually billed | EDF notes |
|---|---|---|
| Migration or modernisation project | Fixed fee in milestones | Each milestone invoice is a Part 2B row in the month it is raised |
| Managed cloud operations | Monthly retainer, sometimes per resource | Steady monthly rows; good candidates for periodic declarations |
| FinOps and cost optimisation | Fixed fee or a share of savings | Savings-share invoices vary in value; describe the basis clearly |
| Architecture and advisory | Time and materials | Monthly invoices with timesheets |
| Cloud consumption recharges | Pass-through of hyperscaler bills, sometimes with a margin | Needs a policy decision; see below |
Our article on milestone billing for export projects covers the project side, and usage-based billing covers variable invoices.
Software or Services in field 1.1
The EDF asks you to classify the export as Goods, Services or Software. Cloud consulting sits on the boundary.
- Writing infrastructure-as-code, building deployment pipelines or developing cloud-native applications looks like Software.
- Advising on architecture, operating environments and providing support looks more like Services.
If your month mixes both, ask your bank whether it wants one form or two. The choice also affects where you can file: software exports outside an SEZ can go to the AD bank or STPI, since AD banks are now specified authorities on par with STPI. Many firms simplify by sending everything to their AD bank.
Codes to discuss
| Work | SAC to consider | Purpose code to consider |
|---|---|---|
| Cloud architecture advisory, support | 998313 | P0802 (software consultancy/implementation) |
| Building cloud applications and pipelines | 998314 | P0802 or P0807 (off-site software exports) |
| Managed hosting and infrastructure provisioning | 998315 | Confirm with bank |
| Other IT services | 998319 | Confirm with bank |
The difference between P0802 and P0807 trips up many IT firms; our glossary entry on purpose codes explains how the codes work. Always confirm the final code with your bank and your CA.
Recharging cloud consumption
Some firms buy cloud capacity on their own account and bill clients for it, sometimes with a margin, sometimes at cost. This creates questions that do not arise for pure consulting:
- Is the recharge part of your service, or a reimbursement of a cost incurred on the client's behalf?
- If you pay the hyperscaler from India, are you importing a service before you export one?
- Does the recharge belong on the same invoice and EDF row as your consulting fees?
There is no one-size answer, and the GST and FEMA treatment depends on your contracts. Before you scale this model, have your CA and bank look at it. Where possible, many firms prefer clients to hold the cloud account directly, which keeps your invoices purely for your own services. This is general information, not legal or tax advice.
A worked example
Stratus Bridge Technologies Pvt Ltd, a 60-person cloud consultancy in Hyderabad, raised four export invoices in December 2026:
| Invoice | Client | Country | Description | Amount |
|---|---|---|---|---|
| SB/1201 | Halcyon Retail Inc. | USA | Migration milestone 3 of 4 (90% billed, 10% retained) | USD 27,000 |
| SB/1202 | Halcyon Retail Inc. | USA | Managed operations, December | USD 6,500 |
| SB/1203 | Fjord Logistics AS | Norway | Architecture review | EUR 8,800 |
| SB/1204 | Kowhai Health Ltd | New Zealand | FinOps savings share, Q4 | NZD 5,100 |
The December EDF is due 30 January 2027, with four Part 2B rows. Stratus ticks Software in field 1.1 after its bank confirmed that a combined form was acceptable, and explains the advisory and FinOps rows in the remarks column.
The retention is the interesting bit. Halcyon's contract holds 10% of each milestone until final acceptance, which is planned for June 2027. Stratus invoices only the 90% now. If it had invoiced the full amount and waited for the retention, the 9-month clock for the retained part would have started on 31 December 2026 and run out on 30 September 2027, uncomfortably close to a slipping acceptance date. By invoicing the retention separately on acceptance, it gets a fresh invoice date for that amount. Check that this approach fits your contract and GST timing with your CA.
The migration invoice is above ₹10 lakh, so when paid, Stratus will give the bank the invoice, FIRA and matching instructions. The other three can go into a periodic realisation declaration.
When realisation runs late
Large projects slip. If a payment will clearly miss the 9-month window, ask your AD bank for an extension before the deadline, with a reasoned explanation and supporting emails. Our realisation extension request letter gives you a structure.
GST and LUT in brief
Cloud consulting exports are zero-rated when the Section 2(6) IGST conditions are met. Under LUT (Form GST RFD-11), no IGST is charged and the invoice should carry "Supply meant for export under LUT without payment of IGST". The EDF does not change GST or income tax; it sits alongside them.
Frequently asked questions
Should a cloud consulting firm tick Software or Services on the EDF?
It depends on the work. Building cloud applications and infrastructure code looks like software; advisory and operational support look like services. If your invoices mix both, ask your bank whether it wants one combined form or separate forms.
Can cloud consultancies file the EDF with STPI?
For software exports outside an SEZ, yes: you can file with your AD bank or with STPI. For services other than software, the EDF goes to the AD bank. SEZ units file with the Development Commissioner.
Do cloud consumption recharges go on the EDF?
If they are invoiced to the foreign client as part of an export invoice, they will be part of the value declared. Whether they should be invoiced that way, and how they are treated for GST and FEMA, depends on your contracts. Get advice before you set up the model.
How do milestone retentions affect the 9-month rule?
The 9-month realisation period runs from the invoice date. If you invoice an amount that the client will only pay on acceptance months later, the window may be tight. Some firms invoice retentions separately on acceptance; confirm the approach with your CA.
What SAC code fits managed cloud services?
Managed hosting and infrastructure provisioning is commonly discussed under 998315, while support-led managed services may fit 998313. Settle the code with your CA based on your contract wording.
Bottom line
For cloud consultancies, the EDF is straightforward once the classification, recharge and retention questions are settled. Decide them with your CA and bank early, then prepare each month's form with the free EDF form generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.