GST Compliance Guide for Freelancers
If you provide services independently in India, navigating the Goods and Services Tax (GST) framework can be daunting. From generating invoices using a GST Calculator to filing monthly returns, compliance is mandatory once you hit certain thresholds.
The Turnover Threshold
For service providers (freelancers, consultants, software developers), GST registration becomes mandatory once your aggregate annual turnover crosses ₹20 Lakhs (₹10 Lakhs for special category states).
If your income is below this threshold, registration is optional. However, some freelancers register voluntarily to claim Input Tax Credit (ITC) on their business expenses (laptops, software subscriptions).
The Inter-State Service Rule
Historically, any inter-state supply of services required mandatory GST registration regardless of turnover. However, recent amendments have relaxed this. If your aggregate turnover is below ₹20 Lakhs, you can provide inter-state services without mandatory registration.
Invoicing Rules (CGST vs IGST)
When billing a client, the type of GST you apply depends entirely on the "Place of Supply":
- Intra-State (Same State): If you live in Maharashtra and your client is in Maharashtra, you charge 9% CGST and 9% SGST.
- Inter-State (Different State): If you live in Maharashtra and your client is in Karnataka, you charge a flat 18% IGST.
If you are billing international clients (Export of Services), it is treated as a "Zero-Rated Supply" under GST. You must have a Letter of Undertaking (LUT) to export services without paying IGST upfront.
Disclaimer: GST laws are highly dynamic. This guide is for educational purposes. Consult a tax professional for compliance verification.