If you are a freelancer, software developer, designer, digital marketer or any other IT professional working for clients in India or abroad, GST applies to your services. Many freelancers are unaware of their GST obligations until they receive a department notice. This guide covers everything you need to know about GST for freelancers and IT professionals in India in 2025.
GST Registration Threshold for Freelancers
GST registration is mandatory for service providers (which includes all freelancers) when their aggregate turnover exceeds ₹20 lakh in a financial year. For those in special category states (not Kerala), the threshold is ₹10 lakh.
However, there is an important exception: if you provide services exclusively to clients outside India (export of services), you may be exempt from mandatory registration regardless of turnover — but voluntary registration is recommended to claim ITC refunds.
GST Rate on Freelance Services
Most freelance services — including IT services, software development, design, consulting, writing and digital marketing — fall under SAC code 998314 or related codes and attract 18% GST (9% CGST + 9% SGST for domestic clients, or 18% IGST for inter-state clients).
GST for Freelancers Working with Indian Clients
If your Indian clients are GST-registered businesses, you must charge 18% GST on your invoices, collect it and remit it to the government through monthly GSTR-3B filings. Your clients can then claim ITC on the GST they paid you.
If your Indian clients are individual consumers (not GST-registered), you still collect and remit 18% GST.
GST for Freelancers Working with Foreign Clients
Services provided to foreign clients qualify as "export of services" and are zero-rated under GST — meaning you do not charge GST on your invoices. But you must:
- Register for GST (mandatory if turnover exceeds ₹20 lakh even from exports)
- File an LUT (Letter of Undertaking) before exporting without paying IGST
- Receive payment in convertible foreign exchange (USD, EUR, GBP, etc.) — this is the key condition for the transaction to qualify as export of service
- Collect FIRC (Foreign Inward Remittance Certificate) from your bank for each foreign payment received
- File GSTR-1 showing export invoices and GSTR-3B regularly
ITC for Freelancers
Once GST-registered, you can claim ITC on business expenses that attract GST — such as laptop/computer purchases, software subscriptions, internet services, office rent, professional services and similar inputs used in your freelance work. This ITC can be set off against the GST payable on domestic client invoices.
GST Invoicing Requirements
Every GST invoice must include your GSTIN, the client's GSTIN (if they are registered), invoice number, date, description of services, SAC code, taxable value, GST rate and amount, and total invoice value. For export invoices, include "Supply meant for export under LUT" and the LUT reference number.
Conclusion
GST compliance for freelancers and IT professionals is simpler than it seems once you understand the basics. The key obligations are registration at the right time, correct invoicing, monthly filings and LUT maintenance for export clients. SPOTON handles all of this for freelancers in Calicut and across Kerala. Contact us today.
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