Get To Know about GST Registration for Freelancers

The Goods and Services Tax (GST), whether it be an enterprise or a small or mid-sized business, has impacted every area of the Indian economy. Yes, even independent contractors are caught in their net, but they may or may not be required to pay GST.

Even though you are exempt from GST as a freelancer, it is still vital to understand how GST functions since, whenever your firm expands, you will need to register it under GST.

Definition of a Freelancer under GST

An individual who does services under the contract is known as a freelancer. The same employment regulations do not cover them because they are not employees of an organization. Freelancers are subject to the same GST regulations that apply to service providers.

What is the GST Registration limit for a freelancer?

The following circumstances necessitate a freelancer's mandatory registration under GST as a service provider:

• When annual revenue is greater than Rs 20 lakh (For states other than the North-Eastern States)
• When annual revenue crosses 10 lakh rupees (For North-Eastern states)
• Regarding services covered by OIDAR services (*online information and database access and retrieval services),
• If the value of the export service exceeds Rs 20 lakh.

According to the GST Act, OIDAR services include the following services:

• Cloud-based services delivery
• Using the Internet to advertise
• games offered online
• There is a provision for online selling software, movies, music, and other intangibles.
• she is transferring data or information to anyone in electronic form across a computer network, whether for retrieval or another purpose.

Can a freelancer register as a composite dealer?

Any service provider is not permitted to choose the composition scheme under the GST Act's provisions. An exception to this rule is a service provider that offers restaurant services.

Therefore, a freelancer is not permitted to choose the composition scheme.

You can read about the GST Composition Scheme to learn more about the benefits and drawbacks of the composition scheme.

Documents required for GST registration

• You're picture
• A copy of your Aadhaar card and PAN
• Proof of identity and address
• Most recent bank statement or a canceled check
• Your electronic signature
• Telephone bill or electricity bill
• The agreement for renting office space
• Certificate of No Objection

Which GST rates apply to freelancers?

Following the type of service rendered, the GST rates that apply to independent contractors are 0%, 5%, 12%, 18%, and 28%. You must charge your customers 18% GST if there is no set price for the service being supplied.

Check out our free GST calculator if you're curious about how to add profit margins to your freelance services and get accurate GST-inclusive & exclusive rates.

Invoicing rules for freelancers

A freelancer should always use GST-compliant invoices. The invoice should have all the relevant details, including the recipient's and the service provider's GSTINs, the SAC for the services, the date, the cost of the services, and so forth. You can use Razorpay Invoices to make GST-compliant invoices by consulting our GST invoice tutorial.

Is a freelancer eligible to claim an input tax credit?

With an input tax credit (ITC), you can deduct the tax you already paid on purchases from the GST that will be due as a result of your sales. All regular taxpayers who are enrolled for GST registration are permitted to use ITCs to lower their GST obligations.

The same taxes paid on services utilized by a registered freelancer to provide any service may also be used by them.

As an illustration, a freelance photographer charges Rs. 2,50,000 for a wedding session and hires a printing company for Rs. The following is the net GST due in this scenario: