Jump to content

Indian Freelancers and GST: 2 Points

ghemachandar1

By ghemachandar1
in Lounge

Recommended Posts

ghemachandar1 Rookie

ghemachandar1

Posted
Posted

(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.

Link to comment
Share on other sites
  • Replies 60
  • Created
  • Last Reply
ghemachandar1 Rookie

ghemachandar1

Posted
  • Author
Posted

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

Good, lot of time then.

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 😡 Sucks big time.

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

Link to comment
Share on other sites
manish30885 Newbie

manish30885

Posted
Posted

Good, lot of time then.

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 😡 Sucks big time.

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

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

Link to comment
Share on other sites
manish30885 Newbie

manish30885

Posted
Posted

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

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 😜

Link to comment
Share on other sites
writer99025 Collaborator

writer99025

Posted
Posted

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 😜

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]

Link to comment
Share on other sites
ghemachandar1 Rookie

ghemachandar1

Posted
  • Author
Posted

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 😜

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 😜

LOL! But the bad news is it’s “3 returns per month” 😏

Link to comment
Share on other sites
eoinfinnegan Mentor

eoinfinnegan

Posted
Posted

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]

Please include an English translation of any post in another language for moderation purposes and to ensure they are not removed.

Link to comment
Share on other sites
manish30885 Newbie

manish30885

Posted
Posted

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 😜

LOL! But the bad news is it’s “3 returns per month” 😏

But the bad news is it’s “3 returns per month” 😏

Wow! that really sucks big time! 😒

but, I am quite sure this rule only applies to those who actually make 20 Lakhs or more annually!

and that hindi text meant that @writer99025 said means “We will think about that after we reach 20 Lakh turnover annually” 😃

Link to comment
Share on other sites
writer99025 Collaborator

writer99025

Posted
Posted

I know I have to consult this with my CA but the 20 lakh pa is total income or just the freelance income?

Just business income - the rest comes under income tax - bank interest income, income from job etc. Right now, I am combining freelance income with other incomes and paying income tax on that. If I can pay under GST, there will be a separation and I will end up paying a lower rate on freelance income. [in fact, I would save a lot if I move to GST…will talk to my CA and find out if I can switch to GST although I make less than 20 lakhs from my freelance business.]

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Go to topic listing
×
×
  • Create New...