A freelancer in India must register for GST once aggregate turnover from services crosses ₹20 lakh in a financial year, or ₹10 lakh in certain special category states. Most professional services are taxed at 18%. Income from foreign clients counts towards the limit but can usually be treated as a zero-rated export, so you may owe no tax on it if you follow the procedure.
Registration becomes compulsory under Section 22 of the Central Goods and Services Tax Act, 2017 when your aggregate turnover exceeds ₹20 lakh in a financial year, or ₹10 lakh in certain special category states. Aggregate turnover is counted across India under one PAN and includes exports and exempt supplies.
Service providers below the limit are generally not required to register merely because they have clients in other states, as a notification exempts inter-state suppliers of services below the threshold. You can also register voluntarily below the limit.
Most professional, technical and creative services, including software development, design, writing, consulting and video editing, are taxed at 18%. Inside your state this is split into 9% CGST and 9% SGST; for a client in another state it is charged as 18% IGST.
Say in your contract whether your fee is inclusive or exclusive of GST. If the contract is silent and you later cross the limit, you may end up paying the tax out of your own fee.
Services to a client outside India can qualify as an export of services under the Integrated Goods and Services Tax Act, 2017 when the supplier is in India, the recipient is outside India, the place of supply is outside India and the payment is received in convertible foreign exchange or in rupees where the RBI permits. Exports are zero-rated.
A registered freelancer can export without charging tax by filing a Letter of Undertaking on the GST portal each financial year, or pay IGST and claim a refund. Export income still counts towards the ₹20 lakh limit.
A tax invoice must carry your name, address and GSTIN, a unique serial number, the date, the client's name and address and their GSTIN if registered, the Services Accounting Code, a description of the service, the taxable value, the rate and amount of each tax, the place of supply, and your signature or digital signature.
For services the invoice must generally be issued within 30 days of the supply. If you are not registered, you issue an ordinary invoice without GST and must not collect tax.
Yes. A notified scheme allows eligible service providers with turnover up to ₹50 lakh to pay tax at a flat 6% without charging GST separately. The trade-off is that you cannot claim input tax credit, cannot issue a tax invoice, and cannot make inter-state supplies under it.
It suits freelancers whose clients are consumers or small local businesses. If your clients are registered businesses that want credit, the regular scheme is usually better.
A regular taxpayer files GSTR-1 for outward supplies and GSTR-3B to pay tax, with an annual return where applicable. Those with turnover up to ₹5 crore can opt for the quarterly return with monthly payment scheme.
Returns are due even in a month with no invoices. Late filing attracts a fee and interest, so calendar the dates as soon as you register.
GST and TDS are different taxes. GST is charged on top of your fee; TDS is deducted by the client from your fee and credited against your income tax. Where GST is shown separately on the invoice, TDS is normally deducted on the amount excluding GST. See TDS on freelancer payments.
Write both points into your agreement using the freelance contract template, so neither side is surprised at invoice time.
Only once registered. Registration is compulsory when aggregate turnover exceeds ₹20 lakh in a financial year, or ₹10 lakh in certain special category states. Below that you are not required to charge GST.
Export income counts towards the turnover limit, so you must register once you cross it. After registering, you can usually export without paying tax by filing a Letter of Undertaking.
No. Only a registered person may collect GST. Collecting tax without registration is an offence under the GST law.
It depends on the service. Services Accounting Codes are grouped by type of service, so check the code for your activity on the GST portal or with a tax professional before invoicing.