"As a freelancer, you are not just your own boss — you're also your own CFO. Understanding GST isn’t paperwork, it’s power." Hey there, Freelancer! You're building websites, writing content, consulting, designing logos, or running campaigns from your laptop, sipping coffee at your favorite café or from your home office. Let’s find out if GST applies to you. Ready? 👉 Let’s go! Step 1: Who Are You? Choose the one that best describes you: A freelance developer/designer/marketer/writer/consultant Working with Indian and/or international clients Earning money independently, not on payroll 👉 If that’s a yes to all, congrats , you’re a freelancer and legally seen as a business in India. GST Basics for Freelancers: An Explained Snapshot Criteria GST Requirement Example Income < ₹20 lakh/year GST not mandatory Ria, a freelance graphic designer in Mumbai, earns ₹12 lakh/year. She doesn't need to register for GST but can do so voluntarily. Income > ₹20 lakh/year (₹10L for NE & hill states) GST registration mandatory Aditya, a freelance digital marketer in Delhi, earns ₹25 lakh/year. He must register for GST, charge 18% GST on invoices, and file returns. Providing inter-state services (within India) Exempt up to ₹20 lakh, per Notification 10/2017-IGST Neha, a consultant in Bengaluru, works with a client in Pune. Even though it’s interstate, she’s under ₹20L/year → no GST needed (but keep an eye on income!). Exporting services (foreign clients) Allowed with Letter of Undertaking (LUT); GST not charged Rahul, a web developer in Kolkata, works for clients in the US and UK. He registers for GST + files LUT → doesn’t charge GST, but can claim Input Tax Credit on expenses like hosting and internet. Importing services/tools (like Canva Pro, Adobe, Zoom) GST applies under Reverse Charge Mechanism (RCM) Tina subscribes to Canva Pro (USD 12.99/month) from Australia. She's registered under GST → she must self-pay 18% GST under RCM and can claim ITC later. 1. Inter-State Services (within India) – You’re Exempt (if income < ₹20L) Scenario: You’re in Chennai and work with a client in Mumbai. If your income is under ₹20L/year, you're exempt from GST, even though the service is inter-state. Once you cross ₹20L, GST registration is mandatory, and you must charge 18% IGST on inter-state invoices. Key reference: Notification No. 10/2017 – Integrated Tax 2. Exporting Services (Clients Abroad) Zero-rated supply under GST means you don’t charge GST, but you’re still eligible to: Register for GST File LUT (Letter of Undertaking) on GST portal (so you’re not forced to charge GST on export invoices) Claim Input Tax Credit (ITC) on eligible expenses Example: You design a website for a client in Canada for ₹1,00,000. You: Send an invoice in foreign currency Show payment received in convertible foreign exchange (e.g., via Wise or SWIFT) File the invoice under LUT — no GST charged You can claim ITC on your expenses like laptops, subscriptions, coworking fees. 3. Importing Services (RCM: Reverse Charge Mechanism) If you buy a service from abroad (B2B), you’re responsible for paying GST in India — even though the seller is outside India. Example: You pay $12.99/month to Canva Pro That's approx. ₹1,080/month As a GST-registered freelancer, you must self-pay 18% GST (₹194.40) under Reverse Charge Mechanism But the good news: You can claim that GST back as ITC This applies to other digital tools like: Zoom Adobe CC Figma Pro ChatGPT Plus 📍 States with ₹10 Lakh Threshold for GST For residents of certain special-category states, the exemption limit is ₹10 lakh instead of ₹20 lakh: 🗺️ Uttarakhand | Arunachal Pradesh | Assam J&K | Manipur | Meghalaya | Mizoram Nagaland | Sikkim | Tripura | Himachal Pradesh 🧾 Benefits of Voluntary GST Registration Even if you're under the threshold, registering voluntarily can help you: Claim Input Tax Credit (ITC) Export services without paying GST (via LUT) Appear more credible to clients Claim refunds for taxes paid on tools and ads ❓ Can a Freelancer Register Under the GST Composition Scheme? Under the GST Composition Scheme, businesses with a turnover of up to ₹1.5 crore can pay tax at a fixed, lower rate instead of regular GST rates. However, freelancers — who are typically service providers — are generally not eligible for this scheme. An exception exists under Section 10(2A) of the CGST Act, where service providers (including freelancers) with an annual turnover up to ₹50 lakh can opt for the composition scheme and pay tax at 6% (3% CGST + 3% SGST). So, while most freelancers cannot register as composition dealers under the general provisions, they can opt in under Section 10(2A) if their services and turnover fall within the specified limits. Regular vs Composition Scheme REGULAR SCHEME COMPOSITION SCHEME Charges GST (18%) Cannot charge GST Claim ITC No ITC Ideal for inter-state/export For local, small providers File monthly/quarterly GSTR Simplified quart