Basics6 min read

GST for freelancers and service providers

Illustration of a freelancer raising a GST tax invoice, with the key rules for service providers: register at ₹20 lakh turnover, 18% GST on services by SAC code, CGST+SGST for in-state and IGST for out-of-state clients, zero-rated exports under LUT, and input tax credit on business inputs.

Freelancers and independent professionals are increasingly within the GST net. Whether you need to register, and how you bill, depends on your turnover and where your clients are.

This guide covers the essentials for service providers.

Do freelancers need GST registration?

Registration for service providers is generally required once turnover crosses the notified threshold (commonly ₹20 lakh, lower in some special-category states). Some situations — like supplying through certain platforms — can require registration earlier. Verify your case.

GST rate on services

Most professional and IT services are taxed at the standard 18% rate under GST 2.0, classified under their SAC code. You charge CGST + SGST for clients in your state and IGST for clients in other states.

Invoicing clients

  • Issue a GST tax invoice with your GSTIN, SAC code, and the tax split
  • For inter-state clients, charge IGST
  • Export of services can qualify as a zero-rated supply (with conditions) — often billed without GST under a LUT

Claiming ITC

Registered freelancers can claim input tax credit on business purchases (software subscriptions, equipment, professional services) used to deliver their services, subject to the usual conditions.

Key takeaways

  • Register once service turnover crosses the threshold (commonly ₹20 lakh).
  • Most services are 18% GST under GST 2.0, by SAC code.
  • Charge CGST+SGST in-state, IGST out-of-state; exports can be zero-rated.
  • You can claim ITC on genuine business inputs.

This guide is general information, not tax advice. GST rules and rates can change with GST Council notifications — verify specifics on the official GST portal or with your CA.

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Related guides

Guide to GST registration: turnover thresholds (goods above ₹40 lakh, services above ₹20 lakh, lower in special-category states), cases where registration is mandatory regardless of turnover (inter-state supply of goods, e-commerce sellers, casual/non-resident persons, reverse-charge liability), the documents required (PAN, business proof, ID and address proof, bank details, DSC), and the apply-verify-GSTIN process.
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FAQ

GST for freelancers and service providers — FAQs

What GST rate do freelancers charge?+

Most professional, consulting, and IT services are taxed at 18% under GST 2.0. Check the SAC code for your specific service.

Do I charge GST to foreign clients?+

Export of services can be a zero-rated supply, often billed without GST under a Letter of Undertaking (LUT) if conditions are met. Confirm eligibility for your case.

Can a freelancer use the composition scheme?+

There is a composition option for eligible small service providers with a lower turnover limit, but it means no ITC and a bill of supply. Compare it against regular registration.