India SaaS buyers face 4% to 22% premium depending on GST status, study finds
A data study by FindThatSoftware reveals that Indian businesses paying for SaaS software face a hidden cost premium beyond the listed price, but the actual burden varies significantly by buyer type. GST-registered businesses effectively pay only around 4% more than the mid-market rate, as the 18% GST on foreign software can be reclaimed through input credit under the reverse-charge mechanism. Unregistered buyers, however, cannot reclaim GST and end up paying roughly 22% above the base price when forex conversion costs are included. The unavoidable cost for all Indian buyers is the forex conversion markup of approximately 3.5%, which applies regardless of GST registration status. The study also notes that rupee-billed Indian software products skip the forex layer entirely, often making them the lowest true-cost option in their category.
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