what will Impact of GST on Freelancers?
Many queries have been received regarding the impact of GST on Freelancers, right the newly implemented GST on freelancers. There is the step by step to understand the applicability of GST on Freelancers working through platforms such as Freelancer, UpWork, Fiverr etc.
Exports of Services from India is considered as an inter-state supply under GST law and hence GST is applicable on all such transactions.
All exports are Nil rated under GST, this means that GST is applicable at the Nil Rated 0% and all compliance needs to be done as per the law including Registration & Return Filing. The purpose of making it Nil rated is to promote exports.
Once you get yourself registered under GST and file return for work done on these platforms, though there would be no GST liability you can claim the refund of GST paid on input services such as wifi bills, rent etc.
Threshold limit of Rs. 20 lakh is applicable only in case of intra-state dealing of goods & services. In case of online business, there is no limit and you need to register your business irrespective of your turnover.
Here online business does not mean just Amazon or Flipkart but Freelance, UpWork & Fiverr as well.
Benefits Under GST For Freelancers in India
If you are registered under GST, you will have to file the monthly summary return with details of work done on these platforms. An additional benefit would be the refund of credit on the input of credit on Input services.
This will reduce the burden of wifi bills, mobile bills, rent, cost of laptops and other types of equipment. As a registered GST dealer you just need to quote your GST number in any purchase of expenses you incur.
Small-scale freelancers will benefit under GST due to an increase in the qualifying limit.