GST for Freelancer in 2018 – Do You Need to Register?

GST for Freelancer: All the queries and doubts that you still have about GST, foreign clients, PayPal, anything else are finally answered

After I wrote an extensive post about GST for freelancers in August, I got an overwhelming response by freelancers all around the country. While many of them were finally clear about the GST rules, others had even more questions. The changing amendments by the GST committee also didn’t help.



quote>Note: Before we move forward, I’d like to clarify that these answers apply to freelancers who provide digital services online like content writing, website designing, digital marketing, and virtual assistance among others. These answers don’t apply to people offering export product or anything else. Also, I am providing these explanations according to the latest updates by the GST committee at the time of writing this article.

GST for Freelancer: All the queries and doubts that you still have about GST, foreign clients, PayPal, anything else are finally answered

Who needs to register?

People who earn more than 20 lacs per annum. There are no other limitations to this rule. It doesn’t matter where your clients are located. If your annual income is more than 20 lacs rupees, then you need to register for GST and charge 18% GST for your services.

I have a GSTN, but I don’t earn more than 20 lacs in a year. What should I do?

You can get your GSTN cancelled immediately and it won’t have any effect on your business. Until the date your GST is cancelled, you have to charge it in all your invoices and file for GST.

My client doesn’t have a GSTN. Can I charge him GST?

It doesn’t matter whether your client has a GST or not, if you have GST, then you have to charge it in your invoice. In case your client has a GSTN, then they will be liable for an input tax credit. You can enter your client’s GSTN when you file for your monthly GST. for it.

Do I need to charge GST to clients based out of India?

Your client’s location doesn’t matter, it’s their bank account’s location which matters. If your client is based abroad but they are paying you from a bank account in India, then you have to charge GST on their invoice.

In case the client’s bank account is based out of India, then you don’t need to charge GST.

This also applies to Upwork and PayPal clients.

I get part of my income from India, and part from abroad. Do I need to register?

If your total income is more than 20 lacs per annum, then you need to register for GST.

I get all of my income from abroad clients. Do I need to register?

If your annual income is more than 20 lacs per annum, then registration of GST is mandatory. If you only have foreign clients then you don’t need to charge GST to any of them and you can just file a zero GST return.

My clients are refusing to pay GST. What should I do?

GST is a tax that you pay to the government and you don’t keep any of it. If your clients don’t want to pay GST, then you will have to pay GST from the total amount paid to you by your clients.

For instance, if the bill is INR 1000, then GST over that will be INR 180. In case your client refuses to pay for it, then you will have to pay GST from that INR 1000 you receive. So essentially you will only get to keep INR 847 and you will have to pay INR 153 as GST to the government.

That is why, if your clients refuse to pay GST, then its best to not work with those clients since you’ll end up getting paid less than you deserve.

PayPal is charging GST now. Can I use PayPal if I don’t have a GSTN?

Yes, you can use PayPal without a GSTN. PayPal is now charging GST over their PayPal fees. This simply means that if you have a GSTN, then you can get an input tax credit by adding your GSTN to your PayPal account. If you don’t have a GSTN, you can still use PayPal without a glitch.

Can I file for GST myself?

The GST website provides you with login credentials through which you can easily file for GST. Though the website is still very cranky and the procedure is pretty confusing. If you can, I’d recommend just getting a CA to do it.

If I am charging GST, what about IT returns?

Your income tax is completely different from GST. Whether you register for GST or not, you still have to pay income tax over all the money that you are earning.

Are there any more questions that I missed out? Please leave a comment below and let me know

 

0

58 thoughts on “GST for Freelancer in 2018 – Do You Need to Register?”

      1. That is where my confusion is. Before we move forward, I’d like to clarify that these answers apply to freelancers who provide digital services online like content writing, website designing, digital marketing, and virtual assistance among others. These answers don’t apply to people providing export services. What is the difference between the 2 statements? Providing digital services online outside India is export of services.

        0
        1. By that I mean, there is nothing defined as “Freelancers” in GST rule. Any entity providing services outside India is an exporter. A freelancer or a company.

          0
  1. I do not have GSTN, but my client does. Two questions-

    1. Regardless of a GSTN, no matter how much I earn I need to pay tax, right?

    2. My client pays GST and he will charge me. Should I include GST amount in my invoice? Coz, if I add 18% tax to my invoice I am liable to pay it as well. But, without a GST how will it work?

    0
    1. Hi Rashi

      Good to see you here 🙂

      1- As mentioned, GSTN is different from income tax. Whether you have GSTN or not, you still have to pay the government income tax over what you earn. If your annual income is less than 2.5 lacs per annum, then you pay zero taxes. But you still need to declare that and file income tax

      2- No, you cannot charge GST without a GSTN. It doesn’t matter whether your client has a GSTN or not, what matters is whether you have a GSTN.

      I am not sure what you mean by ‘he will charge me’ because clients can’t charge you GSTN.

      0
  2. Hi
    Paypal is charging 18% GST on my payments from UPWORK. Is there any way I can get this amount back. Since my income is less than 20L, I guess I do not have to pay GST and I also dont have a GSTN number. So please advise.

    0
    1. Hi Sanhita, you could directly add your bank details on Upwork and get the money transferred directly to your bank account from Upwork, instead of going the PayPal way.
      Upwork charges only $1 for every transaction to Indian bank accounts– despite of the total amount.

      0
  3. Hi i am a software developer working on websites like freelancer.com etc. And all my clients are foreigners. I get paid via payment gateways like Paypal. My income is very much less 20lakh per year. Do i have to register for a GSTIN?
    When i provide software to the client, would that software be considered as a product being exported? THats my doubt…

    0
      1. Thank you ma’am for helping. But will the software being given to client be considered as a |”product being exported”? Can it create any future complications?

        0
  4. Hello Ritika Tiwari,

    I have a Paypal account and I’m getting paid from my clients as i’m a Psychic advisor. I can see that Paypal is calculating GST. How do I claim for that? I get less than $100 in a month. I don’t have a GST?

    0
  5. What is the cancellation process if your income in below 20 lacs? Also, is it advisable to cancel a registered GSTN – as in the future incomes can increase so probably I may have to re-register or the rules might change again… Also, a lot of clients insist on having a GSTN, how do you manage that if you cancel your registration?

    0
    1. Hi Apoorva, for the cancellation process, I would recommend consulting a CA. If your revenue is much lower than 20 lacs and you don’t think you will pass that threshold any soon, then I’d recommend cancelling since there is a lot of hectic mess with invoicing and tax filing that follows GST. Though, if your income is pretty close to 20 lacs, I’d recommend not cancelling since you will have to register again next year.

      Don’t care about the clients pushing for a GSTN, keeping a GST registration is time consuming and expensive, if you are paying a CA to manage the filings

      0
  6. Hi Ritika,

    Thanks for This Article. I have one question.. if i receive say 1.5 lac per month from my foreign Client , and Client pay me via Paypal every month.
    should i need to deposit or pay any kind of GST or Tax to Govt?
    also what if i received more than 20 lac in one year .. is there any liability on me to pay any GST or Tax on received amount?

    Looking forward for your advice

    0
    1. 1- If you received more than 20 lacs per year, you have to register for GST
      2- If you only have foreign clients, you don’t have to charge them any GST but you will have to file for GST every month — A zero GST filing

      0
  7. Hi Ritika, thanks for the informative article, I am the CEO of AR/VR company, we get our payments through paypal (70%) and upwork (30%) , although the questions is not in context of freelancer only.

    1. I have my current account on name of company with two directors associated to it.
    2. All the payments comes into that account only .
    3. The annual income is less then 20 L
    4. I got registered to GST in the first week of Nov-2017.
    5. Didnt pay any GST tax till now

    Based on the above points I have few queries.
    1. Do I need to pay GST as income is less then 20 Lacs in a year.?
    2. If yes will be it taxable from 1 July 2017 to till date (including penalty which I think 50 Rs / day). ?
    3. Should I get my GST number cancelled?

    0
    1. 1- If you have registered for GST, you have to file for GST
      2- Yes, there will be penalty, even if you are just filing zero GST
      3- Yes, you can get it cancelled, but you will still have to file GST for all the months from November till the GST gets cancelled.

      0
  8. Hi Ritika,

    Both your articles are very helpful. I had a small query. I am a freelance writer and work with multiple clients in India. But my annual income/revenue is well under 20 lacs (sadly!). However some of clients are large IT companies and they are insisting I get a GST number else they will have issues. Is that required considering they will in any case deduct tax?

    0
    1. 1- If you don’t have income more than 20 lacs, don’t register for GST. It will only add more hassles and paperwork at your end. Not to mention, you would have to pay a CA. The companies you work with are just asking for GST registration so they can get a tax benefit out of it. Don’t get bullied by the clients, this is solely your decision. The tax clients deduct is TDS, which is completely different from GST.

      0
  9. Hi, Ritika Thanks for nice write up. I am using cleartax for invoicing and also ask some friends. They are telling about LUT / Bond if I don’t want to charge GST to foreign client.

    Here is a thing, I do have GST as I was consulting Indian client, now I am consulting foreign client. I am getting money using foreign wire transfer, in foreign currently. Even invoice is in foreign currency.

    Do I need to go for bond or LUT? Or simple invoice with 0% tax will do. There is a option for Export invoice in GST portal also but I didn’t understand it.

    0
      1. Hi, I was asking about this. -> charteredclub.com/all-about-gst-on-export-of-software-service/

        It would be great if you can provide some clarity over this. Again thanks for reply…

        0
  10. Hi Ritika,

    Just a basic question:
    When you say earnings of more than 20 lacs p.a., is this the total inflow in to my account for the year or is it the amount after deductibles like internet expenses, software charges etc. which are costs at my end for providing the service.

    0
  11. So I have a GST Number and have been raising my bills with GST this whole year but if my income for the year is less than 20 lakh, what should I do?
    Next, if I cancel my GST for the next financial year and in case my income goes beyond 20 Lakhs by the end of it, what can be done?
    How do you think I should go about it; the GST.

    0
  12. Pingback: List Of Websites Where Indian Bloggers, Freelancers Can Add GST Number & Claim Input Tax

  13. Hi, this is still really confusing.. If we are getting paid from foreign client via paypal/payoneer etc, even then we need to register for GST? (say the income is more than 20 lacs like this)

    0
    1. Getting a GST depends on your total income, so yes you would have to register for GST even if you get that money from foreign clients. But you wouldn’t charge GST to foreign clients, so you will file zero GST every month

      0
  14. <20L. All Clients bank in India. 1.18% GST in invoice or not? 2.GSTN registration mandatory? If not,Wouldn't govt. lose revenue? 3. This new update about 20L. Can I get a source,if possible(but not necessary)?

    0
  15. Great to the point post. What if my client has GST and I(as a freelancer) doesn’t. Then what happens in that case. Can I still charge them GST?

    0
  16. Hi,
    My name is Anre. I am a paid writer for two websites and also own a webiste of my own. The two owners of the webiste are paying TDS for me. They will pay TDS when my income exceeds 2.5lakhs. Is there anything that I should do further.

    0
  17. MY CA says that I will need to pay GST and then i will get back refund, my money comes from abroad so If I have to pay GST and then get it back then how its zero gst. Pls help . Really cofused on this matter

    0
  18. Hi Ritika,

    Now freelancers are paying income tax just half of their entire income. means if got total income 8Lakhs for april 2017 to Mar-2018 than I have to pay income tax only for 4Lakhs. Is it true?

    Thanks

    0
  19. Hello, Great post!

    I have few questions. I have a GSTN umber. I earn less than 20L per year through freelance works done online like Freelancer.com or Upwork.com for various services like 360 Photography, Photoshop works, Autodesk Revit BIM Modeling & Point Cloud based Scan to BIM Modeling. I have a regular job and earn very little above 5L per annum without TDS. And I pay my Income Tax through my regular employer.

    Now for the income I earn through Freelancing, can I reclaim any of the GST I paid for charges and subscription noting them as liabilities/expenditures.

    Example 1: I subscribe to Adobe Photoshop Monthly pack costing around INR.676 per month. Let us say it is asking 18% GST. So total investment or Expenditure for that month is INR.797.68. And in a particular month I successfully get my bid chosen for only one project at freelancer.com for $10 . After deducing 3% or INR.150 fee for fixed rate projects charges from Freelancer.com and subsequent 2.9% +$0.3 Paypal.com charges, what I get as a revenue is INR. 481.07.

    Invested in Adobe Photoshop Subscription ₹ 797.68
    Freelancer Income $10 ₹ 670.00
    Freelancer Charges 3% or INR.150 Whichever is greater ₹ 150.00
    Paypal Charges 2.9% + $0.3 ₹ 38.93
    Net Revenue ₹ 481.07
    Net Profit/Loss ₹ -316.61

    So as this month has been a loss, shall I ask the GST to refund any of the GST tax they collected from me via the intermediaries like Paypal for Freelancer or I can not because the GST I paid via these guys are essentially for what they got revenue for THEIR Goods and Services delivered and not responsbile for any loss incurred due to inefficient bidding / pricing / sales done on my part.

    So the only solution is to earn higher or stop getting projects for so cheap or stop buying software for money? And I have other questions. If I buy a camera hardware for my photography freelancing for INR.35000 and in a financial year my expenditure is INR.35000 and the net revenue for all the projects I did is less than the investment say INR.20000, can I count it on a balance sheet and call it a loss year and refrain from paying any GST for the revenue I got from domestic clients withing India who has operating offices in India and Bank Account in India?

    Thanks for reading the long comment. Would really love to get answers to these and will be so greatful.

    0
  20. I am freelancer(software programmer) , and registered my firm as MSME under (udyogaadhaar.gov.in) recently (few months back) . The turnover is expected to be less than 10L. My clients are from india and abroad. I get payments via paypal for foreign clients. Indian clients its directly transferred to the bank.

    Last week i got the GST Registered.

    Query1:
    As per your article, GST is not applicable for Foreign customers. then In Invoice i should put 0% tax ???
    Can this be submitted in to the GST monthly submissions?

    Query2:

    Do i need to charge GST (18%) to Indian customers , as already i am holding GST number?

    Thanks
    suresh

    0
  21. My Location is Tamilnadu and one of my client is in Delhi, Do I need to Register GST?
    My Annual turnover is not crossed 20 Lakhs.
    Thanks.

    0
  22. Hi Ritika,

    Thank you so much for such an informative article!

    I am a freelancer and receive my payments from my overseas clients in USD through PayPal. From November ’17, PayPal has started charging an 18% GST on the PayPal fee. As my total turnover is less than 20 lakhs, I do not need to apply for GST, and as my nature of business is export of services, I am entitled to a claim on refund of the 18% GST that Paypal has charged me. Right? (Hoping that I have my logic correct here!)

    My questions are –

    1. I am going to apply for FIRC (Foreign Inward Remittance Certificate) using the format that PayPal provides. Once I get the FIRC, what steps do I need to follow for claiming a refund of the GST charged by PayPal?

    2. Do I need to apply for GST number for claining refund of GST deducted by PayPal? If yes, then I will also need to file the monthly and annual 0% GST returns (once I have the GST number)? Right?

    3. The GST was charged in the last financial year (Nov 17 – Mar 18), can I still claim a refund? (Please note that I do not have a GST number as yet as that is not mandatory for freelancers earning below 20 lacs)

    Really looking forward to your thoughts, Ritika!

    Thanks!

    0
  23. Nice article,
    But I have a few qs:
    100% of my Income is from foreign clients(in USD) and nothing from India. My Turnover is above 20 Lacs but my Income(Net Profit) is below 20 lacs.
    1) Do I need to apply for GST. If yes, and I still don’t file, what are the consequences? 2) I won’t be deducting any GST from foreign clients, right?
    3) After filing, do I need to submit quarterly statements?

    Thanks

    0
  24. HI, I have started Occasional Freelance Service (IT /Web Development) to Outside of INDIA only. I have completed my first Freelance work.. I haven’t registered my business and also not registered for GST. Now my client from CANADA willing to pay CAD $4000 (2 LAKH) via Foreign Currency Cheque.
    My bank SBI wants invoice copy to clear foreign cheque for same.

    Now to get paid from foreign client through Foreign Cheque… my question are…
    1) Do I need to register my business first???
    2) Do I need to register for GST, whether or not I register my business???
    3) How can I invoice my client if I don’t register my business and Don’t register for GST??
    4) WHAT IS THE BEST ,LEAST COMPLICATED ADVICE FOR MAKING LEGAL INVOICE TO CLEAR THE FOREIGN CHEQUE ??

    Please advice on above points…

    0
    1. Hey Aman,

      I am facing same situation at the moment. Have you got the solution. If yes, please help me.

      I do not have GST, or firm registration and I’m occasional freelancer service provider.

      Please help.

      0
  25. Hi Ma’m,
    I have a client based from outside India on UpWork. When I get paid I use the theDirect to Local Bank (INR) option. So the money comes into my account in INR from UpWork Escrow Inc. Do I have to pay GST on these payments, OR can this be classified as an 0 rated export of service outside India. I have read that one requirement for an 0 rated export is that the money needs to come into my account in a foreign currency.
    Kindly guide me on what I Should do.

    Thank You.

    0

Leave a Comment

Your email address will not be published. Required fields are marked *

Get In Touch

Contact Me

Want to help your business grow & you feel that my expertise aligns with your business vision? Drop me a line! Or you can just say hi.

Ritika