Freelancer's Guide to GST - Everything you need to know:- www.deekpay.com

Is GST (Goods and Services Tax) registration necessary for freelancers? If you are confused about it, don't worry. In this article, we will answer your questions about who needs to register for GST, the advantages of GST registration, and the terms and conditions (T&Cs) of payment related to freelancers.

Who needs to register for GST in India?

GST registration may sound complicated, but not everyone actually has to register. Below are the cases where GST registration is required:

If the annual turnover of your business exceeds 20 lacs (for general category states). For individuals residing in special category states, this limit is 10 lacs. You earn income through OIDAR (Online Information and Database Access and Retrieval) services.OIDAR includes Internet advertising, cloud-based services, and intangible goods such as e-books, entertainment (music, movies, online games), software, and other electronic data such as video courses.

Why is freelance GST important? What are its advantages?

Since Goods and Services Tax (GST) is an indirect tax on the supply of goods and services in India, freelancers also have to pay GST when their annual turnover exceeds Rs 20 lacs.

As a freelancer, registering for GST does not give you a specific advantage.The benefits of GST registration are the same for everyone. Under this new GST regime, you have the option of filing your tax returns online. All you need to do is visit the GST portal, create an account, log in and start filing your GST returns.

The main advantage is that if you sign up, you will be able to claim GST credit, which can be used to balance future GST liabilities or you can also claim GST refund (subject to certain conditions). For example, if your company attracts new clients or customers through Google Ads, you need to pay 18% of the total amount as GST.

Documents required for GST registration

Below are the documents required to register with GST:

Your photograph, copy of PAN and Aadhaar card, identity and residence proof, latest bank account statement or cancelled cheque, digital signature, electricity or telephone bill, office lease agreement, no objection certificate.

What happens after GST registration?

After submitting all the required documents and completing all the necessary procedures, you need to make sure that you follow the correct process to comply with the law.

For invoicing, you need to add the GST amount to the total bill amount. So, if your bill amount is Rs. 25,000 lacs, after adding the GST of 18%, the total amount to be paid by the customer will be Rs. 29,500 lacs.

After collecting GST, you need to submit the GST amount to the government while filing your GST return.

Freelance payment T&C

There are many payment terms and conditions associated with GST registered freelancers.

Depending on the type of service you provide, the GST rate may be 0%, 5%, 12%, 18% or 28%.If there is no specific percentage, you will need to charge the client GST at the rate of 18%.

After obtaining the GST identification number, you have to file your GST returns on a regular basis, i.e., monthly and annually. This is irrespective of your current annual turnover.

You will need to make all payments online. There are 37 returns to be filed each year: three per month and an annual form.

You may be fined if you fail to submit your GST payments on time.

To ensure that you submit your GST on time, you can invoice on the 1st of the following month. This will give you enough time to pay your monthly GST bill.

After paying all applicable taxes, you need to file a monthly summary return (GSTR 3B).

Do freelancers need to register for GST for invoicing?

If you're a freelancer, your clients will expect you to issue invoices. When you submit an invoice, the client may deduct 10% of TDS from each invoice.

If your income is less than 20 lacs or 10 lacs (for special category states), you don't have to compulsorily register for GST even if you invoice.

GST registered freelancers are required to submit invoices as per the latest GST law requirements of the government.

The invoice needs to contain your name, address, freelancer's GSTIN, client's GSTIN, service accounting code (SAC), date, amount and signature.

summaries

Since all your accounts are linked to PAN and Aadhaar, the best option is to do a GST registration.

For many freelancers, GST filing can be a bit daunting. Hiring a Chartered Accountant (CA) who has experience working with freelancers and self-employed individuals will help you ensure that everything is in line with the latest applicable laws.

Extended reading: a guide to GST registration for startups and small businesses