GST for freelancers: A complete guide

GST for Freelancers


Are you a freelancer? Do freelancers need GST registration? What is the importance of GST for freelancers? Don’t worry. We are here to help. In this post, we will talk about who should register for GST, the advantages of GST registration, and the payment terms and conditions (T&C) relevant to freelancers.

Who needs to register for GST in India?

Ever wondered who’s in the spotlight when it comes to GST registration in India? Brace yourself because here’s a little secret: it’s not mandatory for everyone to take the plunge! Let’s dive into the situations that call for GST for freelancers’ registration:

  1. Imagine you’re running a thriving business, and your annual turnover hits the impressive mark of Rs. 20 lakhs. Well, my friend, that’s when the GST registration bell starts ringing. However, if you reside in one of those special category states, the turnover limit drops to Rs. 10 lakhs. It’s like being part of an exclusive club where success opens the doors to GST obligations.
  2. But wait, there’s more to this story! If you find yourself knee-deep in the exciting world of OIDAR services, a universe brimming with internet advertising, cloud-based services, and those intangible gems like e-books, entertainment wonders (think music, movies, and online gaming), software marvels, and even captivating video lessons, then GST registration becomes your golden ticket. You’re stepping into a digital wonderland that comes with its own set of rules.

So, you see, GST for freelancers’ registration isn’t a one-size-fits-all scenario. It’s all about meeting the criteria and embracing the journey into the world of taxes. It may sound like a daunting task, but remember, it’s there to ensure fairness and compliance. So, let’s navigate the exciting realm of registration of GST for freelancers and seize the opportunities that lie ahead!

Importance of GST for Freelancers

As a freelancer in India, when your turnover exceeds Rs. 20 lakhs in a financial year, you’re required to pay Goods and Services Tax (GST). It’s an indirect tax imposed on the supply of goods and services in the country. But what benefits does GST registration offer specifically for freelancers? Let’s find out.

First things first, as a freelancer, you don’t receive any exclusive advantages when it comes to GST registration. The benefits are the same for everyone. However, there’s good news. With the new GST regime, you now have the convenience of filing your tax returns online. It’s as simple as creating an account on the GST Portal, logging in, and starting the process of filing your GST returns.

Now, let’s talk about the main advantage of GST for freelancers. By registering, you become eligible to claim GST credit, which can be utilized to offset future GST liabilities. Additionally, subject to certain conditions, you can also seek a GST refund. This becomes particularly relevant when your firm runs ads on platforms like Google to attract new clients or customers. In such cases, you’re required to pay 18% GST on the total amount.

Documents needed for GST registration

  1. Your photograph
  2. Copy of your PAN and Aadhaar card
  3. Proof of identification and residence
  4. Recent bank account statement or cancelled check
  5. Digital signature
  6. Electricity or telephone bill
  7. Office lease agreement
  8. No objection certificate

Ensuring you have these documents in order will smoothen the process of GST for freelancers’ registration and keep you compliant with the regulations.

What happens after GST registration?

After submitting all the required documents and completing the necessary formalities, you’re ready to embark on your GST journey. But what lies ahead?

When it comes to raising an invoice, there’s an important consideration: adding the GST amount to the total billed amount. For instance, suppose you’ve invoiced a client for Rs. 50,000, and the applicable GST rate is 18%. In this case, you’ll need to include an additional Rs. 9,000 as GST. This means the total amount your client needs to pay will be Rs. 59,000.

Once you’ve collected the GST from your clients, it’s time to deposit the amount to the government while filing your GST returns. Remember, timely compliance is key to maintaining a smooth GST journey.

By following these steps diligently, you can ensure proper adherence to GST regulations and effectively manage your finances while keeping your business on the right track.

Payments Terms and Conditions for Freelancers

Let’s explore the key payment terms and conditions of GST for freelancers:

  • GST Rates: The GST rates on your services vary based on the type of service you provide, ranging from 0% to 28%. If no specific rate applies, charge your clients GST at the standard rate of 18%.
  • Regular Filing: Once you have your GST identification number, filing GST becomes a regular requirement, both monthly and annually, regardless of your turnover.
  • Online Payments: All payments as a freelancer must be made online. You’ll need to file 37 returns each year, including three monthly filings and one annual form.
  • Timely Deposits: Failure to deposit GST proceeds promptly may lead to fines. To ensure timely payment, issue invoices on the 1st day of the following month, providing ample time to settle your monthly GST bill.
  • Summary Return: After fulfilling your tax obligations and paying applicable taxes, submit a monthly summary return (GSTR 3B) to maintain accurate records and comply with GST regulations.

By understanding and adhering to these payment-related terms and conditions, you can navigate the GST landscape effectively and ensure smooth financial transactions as a GST-registered freelancer.

Do freelancers need to register for GST if they raise invoices?

As a freelancer, it is expected that you raise invoices for your clients. However, it’s important to be aware that your client may deduct 10% Tax Deducted at Source (TDS) from each invoice.

If your income falls below Rs. 20 lakhs (or Rs. 10 lakhs for special category states), registering for GST is not mandatory, even if you raise invoices.

For freelancers who are registered under GST, it is crucial to adhere to the latest GST laws mandated by the government when filing invoices. When preparing an invoice, make sure to include key details such as your name, address, GSTIN for freelancers, your client’s GSTIN, Service Accounting Codes (SAC), the date of the invoice, the billed amount, and your signature.

By understanding these considerations, you can effectively manage your invoicing process and ensure compliance with GST for freelancers.

To sum it up considering that your accounts are linked with PAN and Aadhaar, it is advisable to opt for GST registration. While GST filing may appear daunting to many freelancers, engaging the services of a chartered accountant (CA) experienced in working with freelancers and solopreneurs will provide reassurance that you are compliant with the latest applicable laws. This expert assistance ensures that your GST-related matters are handled efficiently and in accordance with the regulations.

In conclusion, managing your finances can be challenging, especially when it comes to taxes and GST for freelancers. However, platforms like OpenFlo can assist you in streamlining your business expenses and managing your finances effectively. OpenFlo provides a user-friendly interface that allows you to track your income, expenses, and GST payments seamlessly. By using OpenFlo, you can simplify your financial management and focus on what you do best – freelancing.

OPEN Flo is an all-in-one digital banking platform, in partnership with Axis Bank, built for Freelancers. It comes with an Axis Bank digital current account integrated with tools for creating and sending estimatesmanaging invoices and payments, tracking client payments, paying vendors, handling expenses, and managing accounting and taxes.

So, if you’re a freelancer looking for a reliable tool to manage your finances and stay on top of your GST obligations, give OpenFlo a try. It’s time to take control of your financial journey as a freelancer and make the most out of your hard-earned money.


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The Open business account comes with a VISA business card that combines banking, payments, accounting, expense management & taxes, in one place.

Tahseen Ahmad
Tahseen Ahmad
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