A software testing company that runs manual, automation or performance testing for foreign clients exports software services, and its invoices go on a monthly EDF. The month that matters is the invoice month, not the month the testing was done: an October sprint invoiced on 3 November belongs on the November EDF, due by 30 December 2026. Once your billing calendar and the EDF calendar line up, the rest is routine.
Key takeaways
- QA work is usually declared as Software in field 1.1, and you can file with your AD bank or STPI; confirm with your bank if your work is mostly non-software QA.
- Remote testing delivered through test-management tools, repositories and reports is "Internet" in field 1.4.
- Likely SAC codes are 998313 or 998319, with 998314 where testing sits inside development contracts; confirm with your CA.
- Timesheet, per-cycle and per-device billing each produce one Part 2B row per invoice.
- The 9-month realisation clock starts at each invoice date, so slow-paying enterprise clients need watching.
Software or services?
Testing is part of the software lifecycle, so most QA firms choose Software in field 1.1. Since SOFTEX has been replaced, software exports are declared on the same single EDF as everything else, and you can file it with your AD bank or STPI. Both are specified authorities, and STPI certification is no longer mandatory.
Some QA work is less obviously software, such as accessibility audits written up as compliance reports or content QA for e-learning modules. If a meaningful share of your month looks like that, ask your bank whether it wants Services or Software, and stay consistent once you have an answer.
Likely codes for QA companies
| QA activity | Likely SAC | Likely purpose code | Note |
|---|---|---|---|
| Manual and functional testing | 998313 or 998319 | P0807 | Off-site work from India |
| Test automation development | 998314 | P0807 | Building automation code is development |
| Performance and security testing | 998313 | P0802 or P0807 | Depends on advisory vs execution |
| QA consulting, test strategy, audits | 998313 | P0802 | Consulting-heavy engagements |
| Testers deputed to client's office abroad | Confirm with CA | Confirm with bank | Delivery mode also changes |
The difference between P0802 and P0807 is explained in our note on software consultancy vs off-site software export codes. Pick codes once, record them, and use them identically on invoices, in Part 2B and in your GST returns.
Billing models and how each lands on the EDF
QA firms bill in more varied ways than most software houses. Here is how each pattern translates.
| Billing model | Typical invoice | Part 2B treatment |
|---|---|---|
| Time and materials | Monthly invoice from approved timesheets | One row per invoice, dated when raised |
| Managed testing per sprint | Fixed fee per sprint or release | One row per sprint invoice |
| Per test cycle | Invoice after each regression cycle | One row per cycle invoice |
| Per device or per execution | Usage-based invoice for a device lab or cloud runs | One row per invoice; describe the usage basis |
| Outcome-linked fees | Base fee plus bonus for defect targets | Declare what is invoiced; bonus goes on the EDF when invoiced |
All of these can sit together on one EDF. One EDF per month covers all service exports to one or more recipients, as our guide to clubbing invoices on one EDF explains.
The timesheet timing trap
Time-and-materials clients often approve timesheets a few days into the following month. That means October's work is invoiced in November. For the EDF, follow the invoice date. The October work, invoiced on 3 November, is a row on the November EDF.
Where firms go wrong is in trying to match the EDF to the work period. They file the October EDF with an invoice that was not raised until November, or they forget the invoice entirely because "October is already filed". Keep your EDF register keyed to invoice dates and the problem disappears.
A worked example: one QA firm, three billing models
Sentinel QA Labs Pvt Ltd, based in Mohali, invoiced the following in November 2026:
- SQ/301, dated 3 November: USD 11,200 to a fintech client in New York for October's timesheet-based manual and API testing.
- SQ/302, dated 18 November: GBP 3,600 to an e-commerce client in Bristol for one release regression cycle.
- SQ/303, dated 30 November: EUR 1,450 to a mobility start-up in Amsterdam for device-lab executions during November.
All three go on the November EDF, due by 30 December 2026. Field 1.1 is Software, field 1.4 is Internet, and field 1.12 is Others. Each Part 2B row shows the client's country, the currency and amount, the SAC code, and a plain description such as "Regression testing cycle, release 4.2".
The New York client's bank deducts USD 35 as charges on payment. Sentinel's net realisable value for that row reflects what it actually expects to receive, and the bank advice showing the deduction stays on file. Because SQ/301 is above ₹10 lakh at Sentinel's book rate, it needs payment evidence and matching instructions; the two smaller invoices go onto the quarterly realisation declaration.
GST, LUT and realisation
QA services to foreign clients are typically zero-rated exports when the Section 2(6) IGST Act conditions are met, including payment in convertible foreign exchange and a place of supply outside India. Most firms file an LUT and print "Supply meant for export under LUT without payment of IGST" on every export invoice. Our export invoice generator includes that wording.
Large enterprise clients sometimes run long payment cycles, and procurement disputes over timesheets can delay payment further. The 9-month realisation window runs from each invoice date, so a November invoice must be realised by the same date in August 2027. If a payment is stuck, ask your AD bank for an extension with reasons before the deadline.
The EDF does not alter your GST or income-tax position; it is a separate FEMA declaration. This is general information, not legal or tax advice.
Frequently asked questions
Do testers deputed abroad change how a QA company fills the EDF?
They can. If testers work at the client's site abroad, the service is delivered differently from remote testing, and field 1.4 may be better described as Others for that work. Discuss with your bank how it wants mixed months shown, and ask your CA about any tax effect of staff working abroad.
Which month's EDF does a timesheet invoice go on?
The month the invoice is dated. Work done in October but invoiced on 3 November goes on the November EDF, due within 30 days from the end of November.
Is test automation development a software export?
Yes, writing automation scripts and frameworks is software development, which is why many QA firms use SAC 998314 for that work. Confirm the code with your CA and use the purpose code your bank agrees fits the service.
How do I declare device-lab or usage-based charges?
Each usage invoice is a normal Part 2B row with its invoice date, amount and a clear description of what was billed. If the charges include third-party costs you pass through, check the GST treatment of those components with your CA.
Can a QA company file the EDF with STPI?
Yes. Software exporters outside an SEZ can file with either the AD bank or STPI. Many firms choose the AD bank simply because that is where the payments arrive.
Bottom line
For QA firms, the secret is matching the EDF to invoice dates rather than work periods, and keeping codes steady across billing models. Build each month's declaration in minutes with our 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.