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.
As service providers, all eligible freelancers are required to register under GST in the following cases mandatorily:
According to the GST Act, OIDAR services include the services mentioned below:
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.