Indian Freelancers and GST: 2 Points


#1

(I’m aware there is a recent thread on “GST for Indian Sellers”, but think a new thread will bring about much clarity on this topic - atleast until @writer99025’s trusted CA reports back.)

Was looking into GST compliance and liability for Indian Freelancers; read and researched extensively and came to a conclusion reported in following two points.


POINT 1: ALL FREELANCERS MUST REGSITER WITH GST.

Even if your income is below the 20lakh/annum threshold for compliance, you must register with GST - because 20lakh is not the only criteria for registration.

See: http://trak.in/tags/business/2017/06/06/gst-freelancers-small-business-owners-questions-answers/ Answer to the second question states particularly:

  • Yes, you will be required to register under GST, even if your business’ annual revenue is less than Rs 20 lakh, which is the threshold for businesses which are required to be registered under GST. Under Section 19 r/w Schedule-III of the Model GST Laws, every form of online business needs to be registered under GST, irrespective of the amount of revenues generated.

See: https://cleartax.in/s/does-gst-apply-to-me And looking at the last but one criteria:

  • (irrespective of turnover, GST registration is mandatory for) Persons who supplies goods/services (except branded services) via an e-commerce operator.

POINT 2: MOST FREELANCERS NEED NOT PAY GST

Even if you resister for GST and filing GST returns, you may not have to pay any Goods and Services Tax at all! There are two reasons for this:

  • Excemption limit of 20Lakh: If you annual turnover is less than 20lakh, you needn’t pay GST. (The limit is 10Lakhs for NE Indian states, I think.)

  • Export of Services is considered a ‘zero rated supply’: When the client/marketplace is in overseas location and you receive payment in “convertible foriegn exchange”, your supply is zero rated and GST doesn’t apply. See: http://taxguru.in/goods-and-service-tax/jolt-service-export-gst.html


In short, as a freelancer you will have to register for GST but needn’t pay GST (mostly). The only situation you’ll have to pay GST is when your turnover exceeds 20lakh/year and the client/marketplace is based in India - which the not the case with Fiverr.

Of course, this is a bird eye-view and there is a tremendous scope for interpretation.

DISCLAIMER: This is not a tax/legal advise. You must make your own inspection and take opinion from a relevant professional before arriving at a decision and plunging into action.

Mod Note: Pinned for visibility due to the importance and relevance of the subject for many sellers. However, you should check all advice you receive from ANY forum post with a relevant professional.


#2

Okay, what’s the deadline? Heard it has been extended?


#3

GST registrations re-open today and are accepted for next 3 months. Here: https://www.gst.gov.in

I would wait for some time and let the dust settle.


#4

Good, lot of time then. (@eoinfinnegan can you pin this thread…very important for Indian freelancers.)


#5

Is it compulsory?

I heard that Facebook paid promotions required GST registration number. On Fiverr too selling requires GST??


#6

Dude, just visit a friendly neighborhood CA and get it done, just like filing tax returns - 5 minutes work.


#7

lol I don’t have any friendly neighborhood CA.

Can I do it on my own?


#8

Yes, lot of time. But this GST bogeyman will consume a lot of it later. There are 3 monthly returns and 1 annual return to file :rage: Sucks big time.

However, the guys at https://cleartax.in/gst made things at bit easier to handle.


#9

You can do it on your own for sure, but I gave you an easy option.


#10

You mean 3 returns every month even for freelancers?


#11

but, this 3 monthly and 1 annual return filing - it’s not applicable for the sellers whose annual turnover isn’t 20 lakh, right?


#12

Yeah, lot of confusion, I bet CAs in India are very busy right now.


#13

Yup! Then again, may be not everyone has to file returns. The first point I raised was for registration. Let’s see.


#14

Yes, That what I think too. But not sure.


#15

LOL…3 returns a month for those who make more than 20 lakhs a year…for Ghemachandar bhai, not for the rest of us :sweat_smile:


#16

May be I reached or haven’t! Let’s not make assumptions :slight_smile:


#17

Congratulations on your 3 returns every month :stuck_out_tongue_winking_eye:


#18

I think he said 3 monthly and not 3 returns per month lol… that would be crazy!

Then the sellers would have more work filling up those long forms on GST sites rather than working on Fiverr :stuck_out_tongue_winking_eye:


#19

#20

Hum ko kya bhai, register karo, bhool jao. LOL. 20 lakhs cross honey key baad sochengey [What does it have to do with us bro, let’s think about it when it crosses 20 lakhs, just register for now and forget all about it]