Executive Summary
- The Indian hosted-software exporter should start with direct sales to verified business customers, using regulated payment providers and destination tax support. Qualifying cross-border business supplies generally place VAT accounting with the recipient. A UK or Irish reseller remains a supported alternative where it purchases the supply, undertakes the customer sale and offers a commercial benefit sufficient to justify its credit exposure. (Value Added Tax Act 1994, ss 7A–8; Directive 2006/112/EC, arts 44 and 196.)
- A merchant of record's contract must establish who owes each debt. Genuine resale creates a customer price debt to the reseller and a separate purchase-price debt to India. An arrangement in which India sells and the foreign provider collects requires its own payment-services analysis. A regulated acquirer does not authorise every other business handling the funds. (Payment Services Regulations 2017, SI 2017/752, reg 2, Sch 1 and reg 138; European Union (Payment Services) Regulations 2018, SI 6/2018, regs 4 and 6(1).)
- Indian GST export treatment can apply to direct sales or genuine resale. It depends on the actual foreign recipient, overseas place of supply and permitted receipt, together with the remaining statutory conditions. Finance Act 2026 omitted the former intermediary place-of-supply rule on 30 March 2026. (Integrated Goods and Services Tax Act 2017, ss 2(6), 2(13), 13 and 16; Finance Act 2026, ss 1(2) and 157.)
- New Indian export rules apply from 1 October 2026. Service exporters use an Export Declaration Form, with special routing for software. The ordinary service-receipt period is nine months from invoice, or twelve months where invoiced and/or settled in rupees. Net payouts, reserves and third-party remittances need an invoice-linked bank record and the applicable authorised-dealer treatment. (FEMA 23(R)/2026-RB, regs 2–8 and 18–19, as amended by FEMA 23(R)/(1)/2026-RB.)
- Consumer sales require a separate launch decision. Direct Indian digital sales can create UK VAT registration and EU destination-VAT obligations. An Irish reseller can use the Union One Stop Shop for eligible consumer supplies to other Member States; an eligible Indian direct supplier can use the non-Union scheme. Neither scheme transfers the actual trader's consumer obligations. (Value Added Tax Act 1994, Sch 1A and Sch 4A para 15; Directive 2006/112/EC, arts 58, 358a–369 and 369a–369k.)
- The UK consumer channel must follow the current disclosure, cancellation and quality rules. The substantive new UK subscription regime is still awaiting commencement for an October 2026 launch. Irish online consumer contracts already require a cancellation function during the statutory cancellation period, following amendments effective on 30 June 2026. (Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, SI 2013/3134, regs 13–16 and 29–37; Consumer Rights Act 2015; Digital Markets, Competition and Consumers Act 2024, s 339; Irish Consumer Rights Act 2022, s 115A.)
- A refund reserve can leave the Indian supplier with an unpaid claim against the reseller. Customer remedies, payment-provider recourse and reimbursement between the businesses remain separate obligations. Insolvency can constrain termination of the software supply, so the contract needs a lawful continuation and migration process. (Insolvency Act 1986, ss 233–233B and Sch 4ZZA; Insolvency (England and Wales) Rules 2016, rr 14.2 and 14.25; Irish Companies Act 2014, s 520A.)
The seller and the two sales contracts
The proposed reseller must undertake the subscription sold to the customer. The Indian company owns, or has sufficient rights to supply, the hosted product. It operates and supports that product from India and has no customer-facing foreign subsidiary at launch. Those premises permit several contractual structures; they do not establish that a provider calling itself a merchant of record is the seller.
Under genuine resale, the Indian company grants the foreign buyer the rights and service needed to sell subscriptions. The UK or Irish buyer contracts with subscribers in its own name. It promises the agreed access, identifies itself on the order and invoice, and owes the applicable customer remedies. India can operate the software and provide support as the reseller's subcontractor. The upstream contract must give the reseller enforceable performance rights against India. This division is consistent with the own-account supply distinction in Indian GST guidance and the FCA's principal-reseller example. (CBIC Circular 159/15/2021-GST, 20 September 2021, paras 3.2, 3.4–3.5; FCA Handbook, PERG 15.5, Q33A.)
The sales-and-money sequence then has two debts. The subscriber orders from the reseller and pays its price through the reseller's payment provider. India supplies the contracted access and invoices the reseller for the acquisition price. The reseller settles that invoice through the agreed banking route. Its retail tax, refund expense and payment charges require separate identification in the settlement calculation. A purchase price tied to retail receipts can still support resale; its legal character depends on the obligations and recourse agreed.
In the collection variant, India contracts with the subscriber and owns the customer receivable. The foreign business receives payment under its collection mandate, deducts agreed charges and remits the balance. It supplies a separate collection or administrative service to India. Customer-level contracts and invoices remain necessary even if the provider issues one aggregate settlement statement. Direct sales use the same Indian customer contract, with a payment provider executing payments and a tax service assisting with reporting.
The strongest case against resale arises where the documents give India the whole customer supply obligation. Further adverse facts include a provider describing itself as collecting agent, holding customer receipts for India and accepting no purchase-price debt. A direct software licence identifying the copyright owner does not settle this question. Its promises must be read with the subscription terms: a narrow restriction on software use differs from an Indian undertaking to deliver the entire paid subscription. (FCA Handbook, PERG 15.5, Q33A; CBIC Circular 159/15/2021-GST, paras 3.1–3.5.)
Payment collection in the UK and Ireland
A reseller receiving its own sale price does not provide a payment service solely because it later pays its supplier. The payment provider processes the customer's payment for that merchant. The UK statutory analysis concerns the activities performed as a business, including execution, acquiring and money remittance. FCA guidance recognises the principal that purchases third-party supplies for resale and receives payment as the intended payee. This application requires a real customer sale by that principal. (Payment Services Regulations 2017, reg 2(1), Sch 1 para 1; FCA Handbook, PERG 15.5, Q33A.)
A collector handling India's customer receivable has a different activity to classify. The UK commercial-agent exclusion requires contractual authority to negotiate or conclude the sale for the payer or payee, acting for one side only. A billing mandate alone does not establish that authority. The technical-services exclusion requires the provider never to possess the transferred funds and excludes payment-initiation and account-information services from its protection. (Payment Services Regulations 2017, Sch 1 paras 2(b) and 2(j).)
Ireland implements the corresponding payment-services categories and exclusions through SI 6/2018. Its commercial-agent test also requires authority for one side, while its technical-services exclusion depends on the defined activity and absence of possession. A collector cannot infer permission from the regulated status of an acquirer farther along the chain. The actual entity must have the required authorisation, registration or applicable exclusion for its own services. (European Union (Payment Services) Regulations 2018, regs 2(2), 4(1)(b), 4(1)(j), 6(1), 30(1)–(3) and Schedule paras 5–6; Directive (EU) 2015/2366, arts 3(b), 3(j) and 37.)
The review should trace account ownership, control of funds, sale authority and the time payment discharges the customer. A term under which the customer remains liable until India receives the onward remittance also matters to the FCA's assessment of dual-sided agency. Licence analysis belongs with those facts. Licentium's payment-institution authorisation guide provides further reading where a proposed collector's activities require that route. (FCA, Commercial agent exclusion, section on acting for both payer and payee.)
Indian GST export conditions
The Indian company can export its own hosted supply through either direct sales or a genuine reseller. Section 2(6) requires an Indian supplier, a recipient outside India and a place of supply outside India. Payment must arrive in convertible foreign exchange or rupees where RBI permits. Supplier and recipient must not merely be establishments of the same person under section 8 Explanation 1. An independent incorporated foreign buyer differs from the Indian supplier's own overseas establishment. (Integrated Goods and Services Tax Act 2017, s 2(6), read with s 8 Explanation 1.)
For ordinary cross-border services, section 13(2) places supply at the recipient's location, subject to its fallback and the specific exceptions. Online information and database access or retrieval services have their own recipient-location rule. The statutory category includes cloud and software services delivered through information technology. Since 1 October 2023, the Indian definition has ceased to require essential automation and minimal human intervention. Indian hosting or support therefore does not, by itself, defeat the proposed export treatment. (Integrated Goods and Services Tax Act 2017, ss 2(17), 13(2) and 13(12); Finance Act 2023, s 160(b); Notification 28/2023-Central Tax.)
The recipient must follow the real supply. For resale, retain the foreign buyer's legal identity, relevant establishment and purchase contract. For direct sales and collection, retain the subscriber's corresponding details. A foreign billing address cannot override contradictory establishment or location evidence. Where the service is actually received by an Indian establishment, or a special place rule applies to a different product, the export conclusion must be reconsidered. (Integrated Goods and Services Tax Act 2017, ss 2(14), 13(2) and 13(12).)
An intermediary arranges or facilitates a supply between other principals and falls outside the definition when supplying the main service on its own account. The CBIC's subcontracting explanation supports an Indian developer performing for a foreign principal's customers. The full contractual arrangement remains decisive. (Integrated Goods and Services Tax Act 2017, s 2(13); CBIC Circular 159/15/2021-GST, paras 3.1–3.5 and 5.)
Finance Act 2026 omitted section 13(8)(b), the former supplier-location rule for intermediary services. The omission took effect on assent, 30 March 2026; section 157 was outside the provisions awaiting notified commencement. A collection finding in this case therefore cannot justify the old automatic Indian place-of-supply conclusion. It instead requires the parties to identify the direct customer supply, the separate collection service and the applicable current place rules. (Finance Act 2026, ss 1(2) and 157.)
Zero-rating, invoices and receipt evidence
The exporter should use the letter-of-undertaking route for the proposed launch if eligible. Exports are zero-rated under section 16. The current route permits supply without IGST under a bond or letter of undertaking, with a claim for eligible unutilised input tax credit. A letter of undertaking is the exporter's undertaking to satisfy the specified conditions; it does not establish that every invoice qualifies as an export. (Integrated Goods and Services Tax Act 2017, s 16(1)–(3); Central Goods and Services Tax Act 2017, s 54; CGST Rules 2017, rr 89 and 96A; Notification 37/2017-Central Tax.)
A notified tax-paid export route also permits IGST payment followed by refund, subject to its conditions. Ordinary service exports fall within the notified class. Service exporters use the applicable RFD-01 process, supported by invoices and receipt evidence; the shipping-bill procedure for goods does not replace it. Credit eligibility and return reconciliation still govern the amount recoverable. (Integrated Goods and Services Tax Act 2017, s 16(4); Notifications 1/2023 and 5/2023-Integrated Tax; CBIC Circular 125/44/2019-GST, paras 2–6 and Annexure A, read with Circular 197/09/2023-GST.)
The Indian invoice should identify the actual foreign recipient and the agreed consideration, with the required export endorsement. A real reseller's acquisition price can differ from its retail price. Where India owns the retail receivable and pays a collector separately, a net payout does not establish a lower export value. The bank certificate, invoice ledger and refund application must reconcile to that distinction. (CGST Act 2017, s 15(1); CGST Rules 2017, rr 46 and 89(2)(c), 89(4)(D).)
GST and foreign-exchange receipt deadlines require separate calendars. Rule 96A(1)(b) now uses one year or the FEMA period, including permitted extensions, whichever is later. Its tax-and-interest payment consequence operates through the specified fifteen-day window, with a further period available from the Commissioner. An RBI extension or permitted reduction does not itself establish that unpaid consideration has been received for GST purposes. (CGST Rules 2017, r 96A(1)(b), as substituted by Notification 12/2024-Central Tax, para 20(i).)
The October 2026 export declaration process
The new export rules require an Export Declaration Form, or EDF, for services, including software. They took effect on 1 October 2026 and superseded the earlier export regulations and directions for the new launch. (Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026, FEMA 23(R)/2026-RB, regs 1–3; A.P. (DIR Series) Circular 20, 16 January 2026, paras 1 and 4 and Annex.)
Regulation 3(2) ordinarily requires the service EDF within thirty days after the end of the invoice month. One form may cover that month's supplies to one or more recipients. For services other than software, the regulation permits submission on or before receipt instead. Software has a broad definition. A Domestic Tariff Area software exporter may submit through an authorised dealer or Software Technology Parks of India; the separate SEZ route depends on that status. The proposed company should agree its product classification and filing route with its authorised-dealer bank before invoicing. (FEMA 23(R)/2026-RB, regs 2(1)(e)–(f) and 3(2).)
The authorised dealer records service declarations and remittances in the Export Data Processing and Monitoring System, or EDPMS. It follows outstanding entries and closes them under the applicable receipt rules. Regulation 19 requires the bank to publish its policy and the main features of its operating procedure. The exporter needs that bank's documentary requirements, its invoice-to-remittance mapping and a record of accepted adjustments. A payment-provider dashboard alone cannot complete the bank's reporting work. (FEMA 23(R)/2026-RB, regs 18–19.)
Net settlements, fees and unpaid reserves
The current service deadline is nine months from invoice for realisation and repatriation of the full or permitted reduced export value. It becomes twelve months where invoiced and/or settled in rupees. The authorised dealer can extend time for accepted reasons. September's amendment replaced the longer periods in the January text before the rules commenced. Settlement schedules and reserve release dates must fit the operative period or an authorised extension. (FEMA 23(R)/2026-RB, reg 5(1), as amended by FEMA 23(R)/(1)/2026-RB, 22 September 2026.)
Receipts must use a permitted currency and route through the authorised banking or payment system. Rupee denomination alone does not prove compliance with the GST export condition. The exporter should retain the remitter's identity, the lawful account route and the bank's inward-remittance evidence. Special Rupee Vostro settlements can qualify under their governing conditions. (Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2023, reg 3; CBIC Circular 202/14/2023-GST, paras 3.5–4.)
The new regulations permit an authorised dealer to approve reduced or non-realisation, qualifying set-off and third-party receipts. Each has a distinct legal basis. A provider fee invoiced separately to India may require import and set-off treatment, while a genuine resale margin forms part of the separate retail transaction. The ledger must distinguish purchase price, fees, tax, credits, refunds, chargebacks, reserve movements and cash received. (FEMA 23(R)/2026-RB, regs 6–8.)
An imported collection service can also create Indian reverse-charge GST where its place of supply is India. The omission of the intermediary location exception matters to that inward supply too. The tax adviser must classify the actual fee and any exemption. Applying imported-service GST to every difference between retail price and wholesale proceeds would ignore the resale transaction. (Integrated Goods and Services Tax Act 2017, ss 2(11), 5(3) and 13; Notification 10/2017-Integrated Tax (Rate), entry 1.)
A reserve can represent an accrued purchase-price debt withheld as security, a contingent price adjustment or money held under a collection arrangement. Those possibilities require different treatment. The contract should cap the reserve, identify permitted debits, provide evidence and challenge rights, and fix release events. If the provider fails, the exporter must pursue the unpaid claim and request the appropriate bank extension or reduction. GST consequences require their own assessment. If proceeds remain unrealised for more than one year after the applicable due date or authorised extension, further exports face mandatory restrictions. The exporter must then obtain full advance payment or an irrevocable letter of credit. (FEMA 23(R)/2026-RB, regs 5–6 and 13; CGST Rules 2017, r 96A.)
Indian payment aggregation follows the activity
The RBI's Payment Aggregators Directions 2025 govern relevant cross-border aggregation and supersede the 2023 PA-CB direction, subject to savings. A genuine foreign reseller collecting its own sale price and paying its supplier debt requires a different analysis from a business aggregating customer funds for Indian merchants. The actual collection and settlement activity determines whether the payment-aggregator provisions apply. (RBI (Regulation of Payment Aggregators) Directions 2025, paras 3, 4, 11 and 19–22, Annexure 3.)
For a collection route within those provisions, establish the bank or non-bank actor, its required status, merchant onboarding and the permitted settlement accounts. The PA-CB rules impose their own transaction conditions, separate inward and outward flows and documentary support for closing export entries. A pending application or an in-principle approval must be distinguished from operative permission. An authorised-dealer set-off does not override the PA-CB prohibition on combining or netting inward and outward transaction funds. The direct-sales recommendation therefore depends on a payment provider authorised for the actual corridor and activity. (RBI (Regulation of Payment Aggregators) Directions 2025, paras 4–5, 10–11, 13, 16, 19 and 22.)
UK VAT on business and consumer subscriptions
Direct Indian sales to qualifying UK business recipients ordinarily use the recipient-location rule and reverse charge. The UK recipient accounts for VAT on the imported service, subject to the statutory conditions. The recipient's relevant establishment and business status need evidence; a small or unregistered business can still have registration consequences from imported services. An actual use-and-enjoyment exception can also alter the ordinary result. (Value Added Tax Act 1994, ss 7A–8, Sch 1 and Sch 4A para 9; HMRC VAT Notice 741A, sections 2 and 5.)
A genuine UK reseller receives the Indian wholesale supply as a business customer. It then makes a domestic sale to its UK subscriber. A VAT-registered reseller ordinarily charges UK VAT on that domestic sale whether the subscriber is a business or consumer. The downstream business purchase does not acquire the cross-border reverse-charge treatment of the separate Indian wholesale leg. Normal input-tax conditions govern recovery by the relevant recipient. (Value Added Tax Act 1994, ss 4, 7A–8 and 24–26.)
The consumer variant changes the direct seller's obligations. Electronically supplied services belong where the non-business customer belongs. An Indian supplier making those UK taxable supplies must address its own registration under the non-established-supplier rules, which do not provide the ordinary domestic turnover threshold. Appointing a tax agent to prepare returns leaves the supplier's tax liability in place. (Value Added Tax Act 1994, Sch 4A para 15 and Sch 1A.)
The UK electronic-services category depends on the actual product, including automation and human intervention. Routine hosting and technical support can accompany an electronic supply. Material bespoke professional services require a separate classification. This UK test must be kept distinct from India's amended OIDAR definition. Customer status for VAT must also be distinguished from whether an individual has statutory consumer rights. (HMRC, VAT rules for supplies of digital services to consumers; Consumer Rights Act 2015, s 2(3)–(4).)
Irish VAT and sales into other EU Member States
Direct Indian supplies to qualifying EU business recipients ordinarily belong at the establishment receiving the service. Where the Indian supplier is not established in that Member State, article 196 generally places VAT accounting with the recipient. In Ireland, the corresponding rules operate through sections 12 and 34 of the VAT Consolidation Act. Retain business-status and establishment evidence, including a validated VAT number where applicable. A VAT number is useful evidence, with the regulation providing rules for other evidence and reasonable verification. (Directive 2006/112/EC, arts 44 and 196; VAT Consolidation Act 2010, ss 12(1) and 34(a); Implementing Regulation 282/2011, arts 18–22.)
An Irish reseller receives India's wholesale service under that business-supply analysis. Its own Irish domestic subscriptions fall within normal Irish VAT accounting when it is registered and taxable. Its qualifying business supplies to customers in other Member States ordinarily use the destination business rule and reverse charge. Irish establishment alone does not make every downstream supply taxable in Ireland. (Directive 2006/112/EC, arts 44 and 196; VAT Consolidation Act 2010, ss 12 and 34.)
For electronically supplied consumer services, article 58 generally uses the customer's residence or usual location. The normal-taxation Irish reseller can elect the Union One Stop Shop for eligible supplies in Member States where it is not established. That scheme provides a reporting mechanism for destination VAT. Irish domestic sales ordinarily remain on its domestic VAT return. An eligible Indian direct supplier can elect the non-Union One Stop Shop through a Member State of identification, or address registration in the relevant destinations. (Directive 2006/112/EC, arts 58, 358a–369 and 369a–369k.)
The EUR 10,000 threshold in article 59c has limited conditions for suppliers established in only one Member State. It does not exempt an Indian direct supplier. The separate EU small-enterprise exemption can affect a qualifying EU-established business and requires its own turnover and national eligibility analysis. The proposed resale flow therefore specifies a reseller ready to account under normal VAT taxation, rather than presuming that every Irish business must charge the same way. (Directive 2006/112/EC, arts 59c and 284, as amended by Directive (EU) 2020/285.)
An electronic service under EU rules is delivered through the internet or an electronic network, with the required automation and minimal human intervention. Standard hosted software can satisfy that test. Customer-location presumptions, billing and bank details, IP information and other commercial evidence must be applied under the regulation's actual conditions. Contradictory evidence requires investigation before assigning a destination. (Implementing Regulation 282/2011, arts 7, 24a–24f and Annex I.)
VAT deemed suppliers and contractual responsibility
VAT can require two supplies even where the private contract describes agency. Article 28 treats a taxable person acting in its own name for another in a service supply as receiving and supplying that service. Article 9a applies a presumption to participating intermediaries in electronic services. Rebuttal requires the underlying supplier to be explicitly identified through the contractual and invoice chain. A participant authorising the charge, authorising delivery or setting the supply's general terms cannot rebut the presumption on that basis. (Directive 2006/112/EC, art 28; Implementing Regulation 282/2011, art 9a(1).)
The Court of Justice upheld that rule in Fenix. A customer's knowledge of the creator does not override a participating platform's specified powers. A person solely processing payment, without participating in the supply, falls within article 9a(3). This VAT classification neither grants payment authorisation nor determines every promise enforceable by the subscriber. Contracts and activities still require the separate payments and consumer tests. (Fenix International Ltd v Commissioners for HMRC, C-695/20, EU:C:2023:127, paras 80–91; Implementing Regulation 282/2011, art 9a(3).)
The UK has its own enacted own-name electronic-agent provision in section 47(4). The EU implementing regulation remains relevant through the statutory interpretative route, rather than every later EU amendment automatically becoming UK law. (Value Added Tax Act 1994, s 47(4); Taxation (Cross-border Trade) Act 2018, s 42(1), (5) and (11); Finance Act 2024, s 28(2), (4)–(8).)
UK consumer checkout, renewal and cancellation
Consumer sales should begin only after the actual trader has implemented the required ordering and remedies process. In the reseller model, that trader is the reseller for its customer supply. In direct sales, India undertakes those duties. An individual buying wholly or mainly outside their business can be a consumer despite a business checkbox. (Consumer Rights Act 2015, s 2(2)–(4).)
Before the order, the trader must disclose the subscription's characteristics, legal seller, total price, billing-period cost and duration. Automatic extension, termination conditions and minimum commitment require clear terms. The electronic order must make the payment obligation explicit, followed by confirmation on a durable medium. The checkout, receipt, support route and refund notice should identify the same seller. Current unfair-commercial-practice rules also require the relevant identity and total-price information in an invitation to purchase. (Consumer Contracts Regulations 2013, regs 13–16 and Sch 2; Digital Markets, Competition and Consumers Act 2024, ss 225 and 230; SI 2025/272, reg 2.)
Distance service contracts and contracts for digital content not supplied on a tangible medium normally allow cancellation until fourteen days after the day the contract is entered. Early performance of a service requires an express request. Loss of cancellation on full performance also requires the consumer's acknowledgement of that consequence. An ongoing subscription is not fully performed merely because access has been activated. With the necessary information and request, cancellation can require a proportionate payment for service received. (Consumer Contracts Regulations 2013, regs 29–30 and 36.)
Non-tangible digital content has a different early-supply rule. Prior express consent and acknowledgement of losing cancellation are required for supply to begin during the cancellation period. The contract confirmation must record them. Missing consent, acknowledgement or required confirmation can prevent charging for that supply. The seller must apply these rules to each relevant content or service obligation, while preserving statutory quality remedies. (Consumer Contracts Regulations 2013, regs 16 and 37; Consumer Rights Act 2015, ss 33–47.)
Statutory quality remedies continue independently of change-of-mind cancellation. Paid digital content must meet the applicable quality, fitness and description standards. Repair, replacement and price reduction operate under their respective conditions. Service elements require reasonable care and skill, with the relevant repeat-performance and price-reduction remedies. The trader cannot exclude the mandatory rights by making the consumer wait for an Indian supplier indemnity. (Consumer Rights Act 2015, ss 34–36, 42–47 and 49–57.)
The trader should record which refund rule applies. For ordinary non-goods distance cancellation, reimbursement is due without undue delay and no later than fourteen days after the day the trader is informed of cancellation. The relevant quality-remedy refund is also due without undue delay, within fourteen days beginning with the day the trader agrees entitlement. Cancelling recurring-card authority also differs from terminating the underlying subscription: a remaining contractual amount must be assessed separately from permission to debit the card. (Consumer Contracts Regulations 2013, reg 34; Consumer Rights Act 2015, ss 44(4)–(6) and 56(4)–(6); Payment Services Regulations 2017, reg 67.)
Fairness and transparency constrain renewal and variation clauses. An unreasonably early non-renewal deadline is on the indicative unfair-terms list. The substantive subscription duties under Part 4 Chapter 2 of the 2024 Act have not yet begun for the October 2026 launch. Their regulation-making powers and the separately commenced unfair-trading rules must be distinguished. Renewal reminders and an accessible cancellation route can be adopted as contract design choices before those new duties take effect. (Consumer Rights Act 2015, ss 62 and 68, Sch 2 para 9; Digital Markets, Competition and Consumers Act 2024, ss 254 and 339.)
Irish consumer duties and wider EU destinations
An Irish consumer subscription must comply with the Consumer Rights Act 2022. Its digital-service provisions govern supply, conformity, necessary updates and remedies. A continuously supplied service carries the applicable conformity obligations throughout the contractual period. Restoration of conformity, price reduction and termination each have statutory conditions. The customer-facing reseller must obtain enough performance and support rights from India to fulfil those duties. Applicable digital-service remedy refunds are due without undue delay and within fourteen days from the consumer's price-reduction or termination notification. Distance-cancellation refunds have their own fourteen-day notice-based rule. (Consumer Rights Act 2022, ss 51–54, 58–62, 67–68 and 117(3).)
The ordering process must disclose the legal trader, billing-period cost, duration, automatic-extension termination terms and minimum commitment. The payment button must unambiguously acknowledge the payment obligation. The trader must provide the required durable confirmation before digital-service performance starts. Amendments effective on 27 September 2026 add information about the statutory conformity obligation and, where the provider makes it available, the minimum software-update period. (Consumer Rights Act 2022, ss 106, 108–109 and Sch 3 paras (h), (t), (u), (qb) and (qc); SI 124/2026, regs 1(2) and 15(b).)
Irish distance contracts ordinarily have a fourteen-day cancellation period. Early service performance, proportionate payment and full-performance loss of cancellation require the statutory information, request and acknowledgement. The separate exception for non-tangible digital content must be applied only where its conditions fit the product. The business must preserve the consumer's conformity remedies after any valid loss of change-of-mind cancellation. (Consumer Rights Act 2022, ss 111–113 and 117–119.)
Since 30 June 2026, a trader concluding the distance contract through an online interface must provide a cancellation function during the statutory cancellation period. It must remain prominent and accessible, allow the required identifying details, provide a separate confirmation step and generate the prescribed durable acknowledgement. This function concerns statutory cancellation; the subscription still needs terms and operations for ordinary non-renewal or termination outside that period. (Consumer Rights Act 2022, s 115A, inserted by SI 309/2026, reg 6.)
Consumer e-commerce must also meet the applicable accessibility requirements for its online sale interface, including identification, security and payment functions. The service rules exempt qualifying microenterprises and contain separate limits for fundamental alteration or disproportionate burden. (European Union (Accessibility Requirements of Products and Services) Regulations 2023, SI 636/2023, regs 2, 3(2)(g), 5(3)–(4), 14–15 and Sch 1 Parts 3 and 4(g).)
Irish unfair-terms rules also affect renewals, assignment and exit. The presumed-unfair list addresses unreasonably early non-renewal deadlines, transfers reducing guarantees without agreement and disproportionate termination formalities. The provider's internal reimbursement terms cannot remove the consumer's statutory remedy. (Consumer Rights Act 2022, Part 6 and Sch 5 Part 1 paras 9, 17 and 20.)
An Irish seller's terms do not complete consumer-law work for every EU destination. Where the trader directs activities to a consumer's Member State, an Irish choice-of-law clause cannot remove the protection of the applicable mandatory home-state law. The Brussels I Recast consumer rules can preserve the consumer's home-court route and restrict where the trader may sue. Each targeted consumer destination therefore needs a national-law and interface check before opening that market. (Regulation 593/2008, art 6; Regulation 1215/2012, arts 17–19.)
Refunds, chargebacks and provider insolvency
In genuine resale, the customer ordinarily owes the reseller and looks to it for the promised subscription and statutory remedies. India holds a separate wholesale receivable and owes its upstream performance obligations. Reimbursement for customer refunds depends on the agreed allocation and any statutory recourse. Irish law gives the trader remedies against a liable previous link for failure to supply or nonconformity. A card chargeback creates a further question under the payment and acquirer arrangements. It does not automatically determine whether the subscription contract requires a refund. (Consumer Rights Act 2022, s 72.)
The agreement should allocate refund approval, execution, funding, evidence, contest rights and reconciliation. The party owing a mandatory customer remedy must meet its own deadline. The two businesses can allocate the economic burden through indemnities, credits or set-off, subject to applicable law. A reserve should be applied only to the liabilities the contract actually secures. (Consumer Rights Act 2015, ss 47 and 57; Irish Consumer Rights Act 2022, ss 67–68, 71–72 and 117.)
If the reseller becomes insolvent, an unpaid reserve or invoice can leave India exposed as a contractual creditor. A ledger label or separate account does not establish a trust, security interest or statutory safeguarding entitlement. In an English and Welsh winding up, future and contingent claims can be proved under rule 14.2. Mutual-dealing set-off under rule 14.25 can leave only the net balance for proof or payment. Priority depends on the actual proprietary rights and applicable insolvency procedure. (Insolvency (England and Wales) Rules 2016, rr 14.2 and 14.25; Insolvency Act 1986, s 107.)
Collection failure can leave a more direct customer obligation with India. The collection terms should identify when payment to the agent discharges the subscriber. If discharge occurs on receipt by the agent, India can remain responsible for supply or refund despite receiving no cash. In direct sales, the Indian customer obligation also survives a separate dispute with its payment provider. The bank's export-receipt and GST treatment must be addressed alongside recovery against the failed counterparty. (FEMA 23(R)/2026-RB, regs 5–8 and 13; CGST Rules 2017, r 96A.)
The exporter must also plan for restrictions on cutting off service. In Great Britain, insolvency protections can apply to software, hosting, storage and IT supplies. Sections 233 and 233A apply to specified essential supplies and procedures. Section 233B imposes further protections, with coordination and exclusions in Schedule 4ZZA. Consent, court relief and specified post-event circumstances require the relevant statutory test. An insolvency-triggered termination clause alone cannot promise an immediate shutdown. (Insolvency Act 1986, ss 233(3)(f), 233(3A), 233A–233B and Sch 4ZZA.)
Irish examinership can also constrain an executory contract, where obligations remain to be performed. Section 520A restricts adverse action solely because of specified examinership or protection events. It gives further protection to essential executory contracts during the protection period on its stated grounds. The contract should provide for lawful continued supply, payment for ongoing performance, notices and an orderly exit. Other insolvency procedures and any Northern Irish proceeding require their own applicable rules. (Companies Act 2014, s 520A, inserted by SI 380/2022, reg 12.)
Software rights and customer migration
Every model needs a documented right to provide the hosted product. A reseller requires express authority for the onward access and any sublicence it promises. The grant should identify the product, permitted rights, territory, duration and use of branding. It should also address existing paid subscriptions after termination and the rights needed for an agreed transition. Where the agreement grants a copyright licence, section 30 requires writing. Section 30A applies section 19 with the necessary adaptations. (Copyright Act 1957, ss 14, 19, 30 and 30A.)
The upstream grant should match the product actually sold. Ordinary hosted access does not require a transfer of source-code ownership or a distribution right wider than the service needs. Employee, contractor and third-party rights must cover the promised exploitation. Customer assignment, replacement seller arrangements and payment mandates require their own legal basis. Software access, customer data and recurring-payment tokens cannot be treated as a single asset automatically transferable when the MoR fails. (Copyright Act 1957, ss 14, 17 and 30; Consumer Rights Act 2015, Sch 2 para 19; Irish Consumer Rights Act 2022, Sch 5 Part 1 para 17.)
Qualifying SaaS also falls within the EU Data Act's rules for data-processing services. The definition concerns on-demand access to shared, configurable, scalable computing resources, and the territorial rule reaches providers serving EU customers from abroad. Those providers must remove prohibited switching obstacles and give customers the required written exit terms. The normal contract includes a maximum two-month notice period and thirty-day transition, with statutory extensions and exceptions. The reseller and Indian operator must allocate the assistance and technical access needed to perform those duties. An Indian provider within that scope must designate an EU legal representative, independently of the GDPR representative analysis. (Regulation 2023/2854, arts 1(3)(f), 2(8), 23–26, 31 and 37(11)–(13).)
Permitted switching charges are limited to directly linked costs before their abolition on 12 January 2027, subject to the specific-service exceptions. The export obligation covers the applicable exportable data and digital assets, with intellectual-property and security limits. It does not require an indiscriminate transfer of the supplier's protected technology. The exit schedule should identify the actual data, formats, retrieval period and deletion process alongside the customer-contract transfer. (Regulation 2023/2854, arts 25, 29–31 and 50.)
Customer data, payment information and Indian access
The parties must assign data roles by each processing activity. The merchant can be a controller for billing, tax records and fraud decisions it determines. India may process customer workspace data on a business customer's instructions, while acting as a controller for separate purposes it determines. A resale contract does not make the MoR the controller of every dataset. Joint determination can require a joint-controller arrangement; processing on another's behalf requires the applicable processor contract. (Regulation 2016/679, arts 4(7)–(8), 26 and 28; UK GDPR, arts 4, 26 and 28.)
The processor terms must address instructions, confidentiality, security, subprocessors, assistance, audits and deletion or return. The product should give the reseller only the information it needs for its seller obligations. Hosted payment collection can allow the software operator to use transaction references and status information without receiving full card credentials. Any access to payment data must follow the actual role, purpose and necessity; regulated payment processing does not authorise unrelated marketing or analytics. (Regulation 2016/679, arts 5, 6, 13–14, 28 and 32; UK GDPR, corresponding articles.)
Indian support access can constitute an international transfer even when the server remains in Europe. India has no general EU or UK adequacy route. (European Commission, Adequacy decisions; ICO, Is the restricted transfer covered by adequacy regulations?) The transfer documents must identify the data exporter and recipient. They must cover the actual controller-to-processor, processor-to-subprocessor or controller-to-controller flow. For eligible EU transfers, the 2021 standard contractual clauses provide modules for those relationships, together with duties to assess third-country law and effective protection. Those clauses apply only where the Indian recipient's relevant processing is not subject to the GDPR. If it is subject to the GDPR, the data exporter must select another applicable Chapter V mechanism. (Regulation 2016/679, arts 44–46; Commission Implementing Decision 2021/914, art 1(1), Annex, clauses 14–15.)
UK transfers require the applicable UK safeguard, ordinarily the International Data Transfer Agreement or the UK Addendum where its conditions fit. Current article 46 also requires the transfer's data-protection test to be met through a reasonable and proportionate assessment. Protection after transfer, assessed as a whole, must not be materially lower than under the UK GDPR and relevant Data Protection Act 2018 provisions. Signing a document without the required assessment and measures does not complete that test. (UK GDPR, art 46(1A), (2), (6)–(8); Data (Use and Access) Act 2025, Sch 7; SI 2026/82, reg 2(z9).)
The Indian supplier must separately assess direct territorial application where it targets individuals or monitors their behaviour. Where article 3(2) applies, article 27 can require an EU or UK representative, subject to its limited exceptions. Selling through a foreign reseller does not decide that territorial question. The absence of a customer-facing subsidiary therefore leaves possible representative and direct compliance duties to be addressed. (Regulation 2016/679, arts 3(2) and 27; UK GDPR, arts 3(2) and 27.)
The Indian operator retains domestic duties for the information it handles. Section 43A can impose compensation liability where negligent security of sensitive information causes wrongful loss or gain. The 2011 rules require the applicable privacy policy, security and transfer arrangements, with collection and disclosure duties interpreted according to the contracting role. The main DPDP processing duties and the omission of section 43A are scheduled later than this October 2026 launch. (Information Technology Act 2000, s 43A; GSR 313(E), 11 April 2011, rr 3–8; Department of Information Technology clarification, 24 August 2011; GSR 843(E), 13 November 2025, cl (c).)
Permanent establishment and tax character of payments
An independent reseller purchasing and selling on its own account reduces the agency facts associated with a permanent establishment. It does not remove a fixed-place, personnel or dependent-agent inquiry. Authority to bind India, habitual order activity and the actual foreign facilities matter under the relevant treaty wording. The absence of a foreign subsidiary is not sufficient to establish the absence of a taxable presence. (UK–India Double Taxation Convention, art 5; Ireland–India Double Taxation Agreement, art 5.)
The payment's character also depends on the rights and services granted. Access to hosted software, a right to exploit copyright and technical or consultancy services require separate analysis. The UK and Irish treaties use different royalty and technical-fee provisions, so the same description cannot establish identical withholding treatment. Residence, domestic charging rules and treaty procedures must support any relief. If the reseller is under common control, the associated-enterprise provisions also require an arm's-length review. (UK–India Convention, arts 7, 10 and 13; Ireland–India Agreement, arts 7, 9 and 12.)
The first launch and the documents needed to open it
Direct sales to verified business customers are the recommended first launch for this case. India would contract and invoice as seller, use a regulated provider for the actual payment route and obtain tax support for the selected destinations. That design preserves one customer receivable and avoids introducing a reseller's separate purchase-price credit exposure. The business-recipient reverse charge already supports the ordinary UK and EU VAT treatment, while the new EDF permits monthly aggregation across recipients. This recommendation concerns the proposed structure; it does not assume a quoted fee saving. (Value Added Tax Act 1994, ss 7A–8; Directive 2006/112/EC, arts 44 and 196; FEMA 23(R)/2026-RB, reg 3(2).)
The bank should receive the product description, customer contract and invoice form, payment-flow record, intended EDF route and settlement evidence specification. It also needs the basis for third-party receipts, deductions, any set-off and extensions. The tax adviser should receive the same supply map, customer-location evidence, LUT and return process, imported-fee analysis and refund reconciliation. The payment provider needs accurate merchant identity, activity and onboarding information. The records must describe the same transaction. (FEMA 23(R)/2026-RB, regs 3–8 and 18–19; CGST Rules 2017, rr 46, 89 and 96A; RBI Payment Aggregators Directions 2025, paras 10–11 and 13.)
A genuine UK or Irish reseller becomes preferable where its accepted seller obligations and commercial role justify the additional exposure. A customer requirement for a local contracting seller would materially change that choice. Before adopting resale, India should require the provider to accept its customer sale, owe the agreed acquisition price and maintain matching checkout, invoices and refund operations. The supplier agreement must also provide the necessary rights, tax allocation, settlement evidence and bounded reserve. Licentium's payment-provider contract review checklist offers a procurement aid for those terms. (FCA Handbook, PERG 15.5, Q33A; Directive 2006/112/EC, arts 28 and 44; Copyright Act 1957, ss 19, 30 and 30A.)
If the provider accepts only a collection mandate, the parties should document that model and resolve its payment permission or exclusion. India must retain the direct seller's customer and export records. If business status is not established for VAT, India must resolve the correct tax treatment before sale. Consumer status requires a separate assessment of the customer and the purpose of the purchase. Expansion should then proceed destination by destination, with funded refunds, data-transfer terms and lawful exit arrangements operating before recurring charges begin. (Payment Services Regulations 2017, Sch 1; SI 6/2018, regs 4 and 6(1); Implementing Regulation 282/2011, arts 18–19; Directive 2006/112/EC, art 58; Consumer Contracts Regulations 2013, regs 13–16; Irish Consumer Rights Act 2022, ss 2, 108–109 and 115A.)