A freelancer or consultant in India needs GST registration once total income from services in a financial year crosses ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura). The figure that surprises people: money from foreign clients counts towards that ₹20 lakh, even though no GST is charged on it. Clients in other Indian States do not force you to register early, as long as you sell services. Below the limit, registering is your choice. Above it, you have 30 days.
Three common situations
| Your clients | Registration | GST on your invoices |
|---|---|---|
| All in India, including other States; ₹14 lakh a year | Not required (optional) | None, if unregistered |
| All in India; ₹26 lakh a year | Required within 30 days of crossing ₹20 lakh | GST at the rate for your service: CGST plus SGST for same-State clients, IGST for other States |
| All abroad; ₹26 lakh a year | Required, because exports count towards the limit | None, if the work qualifies as an export and you have an LUT on file |
Why foreign income counts
The registration test in section 22 uses aggregate turnover. Section 2(6) defines it to include exports, exempt supplies and inter-State supplies, added up for everything under your PAN. So a designer earning ₹22 lakh from a client in London and nothing in India has crossed the line. Exports are zero-rated, so registration usually costs such a freelancer no tax. What it costs is paperwork: returns every month or quarter, and an LUT each year.
The same PAN rule catches side income. A consultant who also rents out a commercial property, or sells a few products online, adds those receipts too. Exempt income, such as residential rent, also counts towards the threshold.
When you reach that point, our GST registration service prepares and files the application, including the right service codes for your work.
Clients in other States
On paper, section 24 requires anyone making inter-State taxable supplies to register from the first rupee. For services, a government notification lifts that: a service provider billing clients in other States need not register until aggregate turnover crosses the normal limit. So a Jaipur developer working for a Bengaluru startup is in the same position as one working for a Jaipur client.
This relief is for services only. If you also ship goods to another State, even prints or merchandise, that part needs registration from the start.
Foreign clients: making sure it is an export
Once registered, a foreign-client invoice is zero-rated only if it meets the five conditions in section 2(6) of the IGST Act: you are in India, the client is outside India, the place of supply is outside India, you are paid in convertible foreign exchange (or rupees where the RBI permits), and the client is not your own branch or establishment abroad.
For most remote work (software, design, writing, marketing, research, consulting delivered online) the place of supply is the client’s location, so the test is met. Watch three areas:
- Work on things in India. Services on goods physically in India, or tied to property in India, follow their own place-of-supply rules.
- Acting as a go-between. If you arrange supplies between a foreign client and other businesses rather than doing the work yourself, you may be an “intermediary”. That category has had its own place-of-supply rule, and the law on it has been changing. Check the current position before treating such income as an export.
- How the money arrives. Keep the bank’s inward remittance record for each invoice. A platform paying you in rupees from its own Indian account may not satisfy the foreign-exchange condition.
To invoice without IGST you need a Letter of Undertaking (Form RFD-11), filed free on the portal, as the GST portal’s LUT guide shows, before your first export invoice of each financial year. Under rule 96A, if payment does not arrive within one year (or the longer period allowed under FEMA), the tax becomes payable with interest.
Working through platforms
- Indian platforms that collect tax at source. Section 24(ix) requires registration for people selling through such platforms, but service providers are exempt from that up to the normal turnover limit under a government notification. Below ₹20 lakh, a platform does not force you to register.
- Services where the platform pays the GST. For a few notified services, such as certain passenger transport and accommodation, section 9(5) makes the platform liable for the tax instead of you. Most freelance work is not in that list.
- Foreign marketplaces. Being paid through a platform abroad does not by itself change the export test. The questions are still where your client is and how you are paid.
Once you are registered
- Invoices. Issue a tax invoice with your GSTIN, the client’s GSTIN if they have one, the service code (SAC) and the tax split. Indian business clients will check that their GSTIN is right, because their credit depends on it.
- Returns. GSTR-1 and GSTR-3B monthly, or quarterly under QRMP if turnover is up to ₹5 crore, even in months with no work. Most freelancers choose quarterly.
- Credit on your costs. GST on a new laptop, co-working rent or Indian software subscriptions becomes input tax credit you can use against tax on Indian invoices. If you only export, unused credit can be claimed as a refund.
- Foreign subscriptions. Business tools bought from overseas suppliers are an import of services. Once you are registered, you may have to pay GST on them yourself under reverse charge, and you can usually claim it back as credit.
- Some clients pay the tax for you. A few services, legal services by advocates to businesses being the best known, are taxed under reverse charge in the client’s hands. If that is your only income, the registration question works differently. Take specific advice.
Registering before you have to
Section 25(3) allows voluntary registration. It makes sense if your clients are GST-registered companies that prefer suppliers with a GSTIN, or if you have significant GST costs to recover. It makes less sense if most of your clients are individuals, because GST on top of your fee is a straight price rise for them. Your GST turnover will also be visible against your income tax return, so keep both on the same books.
Frequently asked questions
Do I charge GST to a foreign client if I am not registered?
No. An unregistered person does not charge GST at all. The question is only whether your total turnover, including that foreign income, has crossed the limit.
I crossed ₹20 lakh in February. Do I pay GST on everything I earned this year?
No. Tax applies from the date you become liable to register. Apply within 30 days, and keep your invoices from that date correctly dated.
Can I use the composition scheme as a freelancer?
Only the services option, up to ₹50 lakh, and only with no clients outside your State or outside India. That rules out most freelancers.
Complianto (complianto.in), operated by Mentorcorp Private Limited, is a private consultancy and is not affiliated with any government body. We do not issue official documents. We charge a professional fee for application assistance and advisory services. Applicants can apply directly to the government without our fees via the official portals: MCA (mca.gov.in), Income Tax (incometax.gov.in), GST (gst.gov.in), MSME (udyamregistration.gov.in), FSSAI (foscos.fssai.gov.in), Startup India (startupindia.gov.in), and IP India (ipindia.gov.in).
This article is general information, not legal or tax advice.
