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GST Invoice for Karnataka Businesses — GST Code 29, IT & Startup Guide

Karnataka — home to Bengaluru's massive IT and startup ecosystem — is one of India's top GST-paying states. Karnataka's GST state code is 29. Bengaluru's IT companies, often exporting to global clients, deal with zero-rated exports, LUT filings, and ITC refunds more than businesses in any other state.

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Karnataka GST Quick Reference

Detail Value
GST State Code 29
GSTIN Format 29AAAAA0000A1Z5
State Capital Bengaluru
Key Business Hubs Bengaluru, Mysuru, Hubli, Mangaluru
Major Industries IT, Software, Aerospace, Biotechnology, Textiles
Special Feature Largest IT export state — LUT filings critical

IT Exports and Zero-Rated GST from Karnataka

Bengaluru hosts thousands of software companies exporting to the US, UK, and Europe. All such exports are zero-rated — no GST on the invoice. To export without IGST, Karnataka IT companies must file an LUT (Letter of Undertaking) on the GST portal each financial year. The LUT ARN appears on export invoices. Karnataka software companies with domestic clients simultaneously charge 18% GST on those invoices. The state leads India in ITC refund claims as exporting companies recover GST paid on domestic inputs (office rent, employee salaries do not attract GST, but laptops, software tools, and cloud services do).

Example

A Bengaluru SaaS company invoices a US client USD 50,000 (₹41,50,000). IGST: Nil (LUT filed, ARN: AD2926012XXXXX). Simultaneously invoices an Indian client ₹8,00,000 for the same software. IGST 18%: ₹1,44,000 (inter-state, billing a Delhi client). Total output GST: ₹1,44,000. ITC from inputs (laptops, cloud, office): ₹80,000. Net GST payable: ₹64,000.

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FAQs

What is Karnataka's GST state code?

29. All Karnataka GSTINs start with 29 — e.g., 29AABCU9603R1ZM.

How do Bengaluru IT companies export without GST?

File an LUT on the GST portal each year. Raise export invoices with the LUT ARN and the declaration "Supply under LUT without payment of IGST". Claim ITC refund on inputs.

Do Bengaluru startups need GST registration?

Yes, once turnover exceeds ₹20 lakh. Startups with only exempt services or below ₹20 lakh are not required to register, but voluntary registration enables ITC claims on office expenses.

What GST applies to a Bengaluru company billing a Mumbai client?

IGST (inter-state). A Bengaluru company bills IGST 18% on services to a Mumbai client. CGST + SGST applies only for clients also in Karnataka.

Why Businesses Stop Using Excel for GST Invoices

Manual GST calculation mistakes

One wrong CGST/SGST split or a misapplied rate triggers notices and ITC denial for your buyer.

Slow invoice creation

Copying last month's Excel file, updating dates, recalculating — 20 minutes for what should take 30 seconds.

Formatting breaks on every device

Excel invoices look different on every printer and PDF converter. Clients complain about unreadable layouts.

No easy sharing or payment link

Sending PDFs over WhatsApp with no way for clients to pay directly slows down collections.

Incorrect tax type (IGST vs CGST+SGST)

Excel can't auto-detect intra vs inter-state supply. Wrong tax type = ITC rejected for your buyer.

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Disclaimer: The information in this article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. GST rules and rates are subject to change. Consult a qualified CA or tax professional before making compliance decisions.

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