GST on AI credits, explained
Paying a company abroad in dollars does not avoid Indian GST. It only changes who has to handle it, and what you end up paying. Two cases below, in order: buying it for yourself, then buying it for a registered business.
The short answer
If you have no GSTIN, the foreign seller is required to charge you the 18% itself under the OIDAR rules. If you have one, they stop charging it and you owe the same 18% directly to the government under reverse charge, then claim it back. Either way the tax is the same. Nobody escapes it by paying in dollars, and anyone quoting you a dollar price without it is quoting you an incomplete price.
You are buying it for yourself
You cannot claim the tax back, so for you the 18% is a real cost and it is fair to ask who charges the least on top of it. Here is the whole sum on a ₹10,000 top-up. Both columns get the same ₹10,000, or $100, of model usage, at the same list prices.
Assume the market rate is ₹100 to the dollar throughout, so the numbers stay round and you can check them on a calculator. Our rate is that market rate plus the currency markup, and both are shown on the top-up screen before you pay.
The 5.5% is what the largest dollar-billed gateway charges on card top-ups as of September 2026. Card markup is taken at 4%: the 3.5% an Indian bank typically adds on an international charge, plus the 18% GST it collects on that markup, which comes to a little over 4%; yours may differ. Our currency markup is the live figure, 4% as you read this: the forex fee our card issuer charges us when we pay AI providers in dollars. It moves with that fee and we are working to bring it to zero. Buying straight from a single provider has no gateway fee at all, and if you only ever call one model and your card never declines, that is the cheaper thing to do.
You are buying it for a registered business
For you the 18% is not a cost at all. It is input tax credit: the tax on our invoice sits against your GSTIN and comes straight back, so the real cost of a top-up is the amount before tax. What is left to compare is the fee and the bank.
The row that costs more than it looks is reverse charge. A foreign supplier stops charging GST the moment you hand over your GSTIN, which reads as a discount and is not one: you self-assess the same ₹1,899 and deposit it in cash, because reverse charge cannot be settled out of the credit balance you already hold. You claim it back in a later cycle. Same money, your working capital in the meantime, extra entries every month, and a penalty exposure if it is missed. Our invoice is an ordinary Indian tax invoice with your GSTIN on it, so there is nothing to self-assess and the credit offsets like any other purchase.
What you stop dealing with either way
No reverse-charge self-assessment on every purchase, no foreign remittance paperwork, and no forex markup from your bank on top of the price. One rupee invoice, numbered per financial year, with your GSTIN on it if you have one, and UPI or a RuPay card, whichever works.
This is how the rules read, not tax advice. Your accountant knows your situation; we are describing what our invoice does so nobody assumes the tax is an extra cost of buying from an Indian company. Figures assume ₹100 to the dollar and round to the rupee.