Major Reminders for Freelancers Under GST in India

Taniya Kumra
Taniya Kumra at July 13, 2022

A freelancer is a person who is not an employee and gets paid by various clients to work on an assignment basis, may be short-term or long-term jobs on a contractual/hourly/ piece-rate basis. In short, a freelancer is a service provider where an employer-employee relationship does not exist and all the rules relating to GST shall also apply to freelancers. 

Major Reminders for Freelancers Under GST in India

GST Registration Limit for a Freelancer

As service providers, all eligible freelancers are required to register under GST in the following cases mandatorily:

  • When turnover is more than the sum of Rs 20 lakh in a financial year (For states other than the North-Eastern States)
  • When turnover is more than Rs 10 lakh in a financial year (For North-Eastern states)
  • For services covered under OIDAR services (i.e Online Information and Database Access and Retrieval services)
  • In case of an export service whose value is more than Rs 20 lakh

Internet-based Services for GST

According to the GST Act, OIDAR services include the services mentioned below:

  • Advertising on the Internet
  • Provision for selling e-books, movies, music, software, and other intangibles through the internet
  • Providing data or information, retrieval or otherwise to any individual in electronic form through a computer network
  • Providing cloud-based services
  • Online gaming services

Voluntary Registration for GST

All eligible freelancers are required to register under GST if they meet the above-mentioned criteria. However, if your income from freelance work is less than the threshold limit, you do not fall under the ambit of GST. Even then a freelancer can opt-in for voluntary registration under GST.

Also, as per provisions of the GST Act, any service provider is allowed to opt for the composition scheme. However, service providers with an annual turnover of less than Rs 50 lakhs can opt for the composition scheme and pay a tax of @6% subject to certain restrictions.  

The rates of tax under Goods and Service Tax (GST) are 0%, 5%, 12%, 18% and 28%. The services will be taxable as per the respective slab rates. With Masters India GST Calculator, you can easily calculate GST in a few seconds. If there is no specified rate for the service, you will have to charge 18% GST from your clients.

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