GST for Freelancers

When a freelancer must register for GST, how GST works for services to Indian and foreign clients, and why exports of services are zero-rated.

Many freelancers wonder whether they need to charge GST. The answer depends on income and clients.

When registration is needed

Service providers generally must register for GST if their annual turnover exceeds 20 lakh rupees, or 10 lakh in some special category states.
Some freelancers, such as those supplying through certain e-commerce operators or providing inter-state taxable supplies in some cases, may need to register earlier. Check current rules.

Voluntary registration is allowed and can help if your clients are businesses who can claim input tax credit.

Serving Indian clients

Once registered, you charge GST, usually 18 percent for most professional services, on your invoices. Business clients can claim this as input tax credit. You can also claim credit for GST you pay on business purchases, such as a laptop or software.

You must file regular GST returns.

Serving foreign clients

Services provided to clients abroad, paid in foreign currency, usually count as export of services. Exports are zero-rated:

You don’t charge GST to the foreign client.
You can export without paying GST by filing a Letter of Undertaking (LUT) each year.
You can still claim or get refunds of input tax credit on related purchases.

To qualify as an export, conditions apply, such as the client being outside India and payment received in convertible foreign exchange or as permitted by the RBI.

Does export income count toward the threshold?

Export turnover is included in aggregate turnover for the registration threshold, so freelancers with large foreign income may need to register even though they don’t charge GST on exports.

Practical tips

Keep foreign inward remittance documents as proof of export.
File your LUT at the start of each financial year.
Use accounting software or a GST practitioner if needed.

The export freelancer

A video editor earns 30 lakh rupees a year from clients in the US and UK. Her turnover exceeds the threshold, so she registers for GST and files an LUT. She charges no GST to foreign clients but can claim credit for GST paid on her editing software.

Thinking freelancers with foreign clients never need GST registration

Export turnover counts toward the threshold. Freelancers above it must register, even if exports are zero-rated.

Key takeaways

Service providers generally register for GST above 20 lakh rupees turnover.
GST on most professional services to Indian clients is 18 percent.
Exports of services are zero-rated, often using a Letter of Undertaking.
Export turnover counts toward the registration threshold.