Easy and Complete Guide on GST Registration for Freelancers in India

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The Goods and Services Tax (GST) was introduced in India to make the country a single market. However, with the rush of new businesses and freelancers in the market, the subject of GST has always been confusing for all. This article is an easy and complete guide to GST registration for freelancers in India.

How GST affects you if you are a freelancer?

Under the GST act, all businesses in the north-eastern and hilly states with a turnover of more than Rs 20 lakhs are required to register for GST, and if you are a freelancer living in some other area the exemption limit is doubled to 40 lakhs per annum. Which means if you are a freelancer and you are making 40 lakh or more annually you are required to have GST Registration. Furthermore, if you are providing services on e-commerce portals, you might also need GST Registration.

Once you are registered, you’ll need to charge GST on all of your invoices. You can claim GST credits for any GST that you have got paid on expenses associated with your freelance work.

What is the process for GST registration for Freelancers?

GST is applicable for all businesses and freelancers who are working in India, and this is applicable to freelancers who work online as well. For the freelancers, the eligibility for GST registration for freelancers is as follows:

  1. The freelancer must have a valid PAN card and active bank account in their name.
  2. The freelancer must apply for GST registration online on the GST Portal.
  3. The freelancer will be required to furnish proof of identity, proof of address, and proof of bank account.
  4. The freelancer will be assigned a GSTIN as soon as the registration process is complete.

What to do after GST registration for Freelancers?

After you have been assigned GSTIN, you need to start charging GST on all your eligible supplies of goods and services that you make. You will also need to start collecting GST from all your customers on any supplies that they buy from you.

If you are registered for GST, you will need to regularly do GST Return Filing. You will also need to keep accurate records of all supplies that you make and all GST that you collect and pay.

How to file your  GST Return as a freelancer in India?

As a freelancer, you are required to file your first GST return within 20 days from the end of the quarter in which you registered for GST. You can file your GST return online.

To file your GST return online, you will need to login to the GST Portal using your GSTIN and password. Once you are logged in, you will be able to see your GST return form under the ‘Returns’ tab. To file your return, you will need to fill in all the required information about your business or freelance work and submit it.

What are some common mistakes freelancers make when submitting GST statements?

There are a few common mistakes that freelancers may make while filing their GST returns and some of them are as follow:

  1. They often fail to keep proper records of their income and expenditure, which makes it difficult to accurately file their returns.
  2. If the freelancer claims expenses that are not actually eligible for the GST deduction, resulting in penalties or claims will be disallowed.
  3. They may forget to file their returns on time, which can result in late fees or interest charges.

Penalties under GST for Freelancers

Penalties apply if a self-employed person does not register for GST in case they are liable to register. As a result, there is a fine of up to INR 25,000 for non-registration, and a fine of INR 100 for non-filing returns.

How can freelancers claim GST Refund?

Freelancers can claim GST Refund through:

  • Filing GST RFD – 01
  • Get approval from taxation authorities in GST RFD – 02 Form

In short, it’s best for freelancers to consult a GST Practitioner, CA or GST Experts in order to thoroughly understand about GST. This will help freelancers to take advantage of GST and take their business to next level.

Take a call from Expert

Moreover, If you want any other guidance relating to GST Registration, please feel free to talk to our business advisors at 8881-069-069.

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