Is GST required for freelancers in India? Threshold, exports, LUT and 44ADA

By Sunil Kumar Palika · Updated 19 September 2026 · 6 min read

Short answer. Not until your aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura). That holds even if your clients are in other states or abroad. Once registered, you charge 18% GST on most services to Indian clients, and you can export without GST by filing a Letter of Undertaking (LUT) every year.

Is GST registration mandatory for freelancers?

GST law treats a freelancer as any other supplier of services. Section 22 of the CGST Act requires registration once aggregate turnover in a financial year exceeds ₹20 lakh. Aggregate turnover is counted on your PAN across India. It includes taxable receipts, exports and exempt supplies; advance rulings have treated interest on deposits and loans as an exempt supply that counts. Salary does not count.

Your situation	GST registration needed?
Turnover up to ₹20 lakh, clients in your own state	No
Turnover up to ₹20 lakh, clients in other states	No. Service providers are exempted by Notification 10/2017-Integrated Tax
Turnover up to ₹20 lakh, foreign clients	No. Exports count towards the limit, but the same exemption applies
Turnover above ₹20 lakh (₹10 lakh in the four states above)	Yes. Apply within 30 days of crossing the limit
You are liable to pay GST under reverse charge	Yes, whatever your turnover (Section 24)
A client or platform insists on a GSTIN	Optional. Once you register voluntarily, every rule applies from day one

What is the GST rate for freelancers?

Most professional and technical services (software, design, writing, consulting, marketing) are taxed at 18%. The rate changes of September 2025 left this untouched. On a ₹1,00,000 invoice to an Indian client you add ₹18,000 and collect ₹1,18,000. The ₹18,000 is not your income: you pay it over after deducting input tax credit on business purchases such as a laptop or software.

I work for foreign clients. Do I pay GST?

Export of services is zero-rated under Section 16 of the IGST Act. A supply is an export only if you are in India, the client is outside India, the place of supply is outside India, you are paid in convertible foreign exchange (or in rupees where the RBI permits), and you are not merely a branch of the client. A registered exporter has two routes:

With an LUT. File Form GST RFD-11 on the GST portal. It is valid for one financial year, so renew it before your first export invoice each April. You then invoice without GST.
Without an LUT. You pay 18% IGST on each export invoice and claim a refund later. It works, but it blocks your cash.

Keep the bank's inward remittance advice for every export invoice as proof of receipt in foreign exchange.

What is reverse charge, and why should a freelancer care?

Normally the supplier collects GST. Under reverse charge the buyer pays it directly. Freelancers meet it mainly when they import services: an overseas subcontractor, or foreign software billed without Indian GST. If you are registered, you pay 18% IGST under reverse charge and usually claim it back as input tax credit. If you are unregistered, overseas providers of online services are required to charge you Indian GST themselves. Anyone liable under reverse charge must register regardless of turnover, so check before you hire help abroad.

Can freelancers use the composition scheme?

The regular composition scheme is for traders, manufacturers and restaurants. Service providers have a separate option under Section 10(2A): 6% tax on turnover up to ₹50 lakh. The conditions are strict: no inter-state supplies (exports included), no GST collected from clients, no input tax credit, and no sales through e-commerce operators that collect tax at source. Most freelancers with clients outside their own state cannot use it.

Invoices and returns once you register

Invoice within 30 days of supplying the service. Show your GSTIN, a serial number, the client's GSTIN if registered, the SAC code, place of supply, taxable value, rate and tax. Export invoices state that the supply is under LUT without payment of integrated tax.
Returns: GSTR-1 lists your invoices and GSTR-3B is the summary with payment. With turnover up to ₹5 crore you can opt for the QRMP scheme: both returns quarterly, tax paid monthly.
Nil returns must still be filed. Missed filings attract late fees and, eventually, cancellation.
Annual return GSTR-9 has been optional for turnover up to ₹2 crore.

GST and income tax for freelancers: the 44ADA link

GST and income tax are separate laws. For income tax, people in specified professions (engineering, architecture, law, medicine, accountancy, technical consultancy, interior decoration, information technology and a few others) with gross receipts up to ₹50 lakh can declare half their receipts as income without keeping full books. The limit rises to ₹75 lakh when no more than 5% of receipts come in cash. From 1 April 2026 this presumptive scheme sits in Section 58 of the Income-tax Act, 2025 (formerly s.44ADA).

Worked example. Receipts of ₹30 lakh in FY 2026-27 give a presumptive income of ₹15 lakh. New-regime tax on ₹15 lakh is ₹1,05,000, or ₹1,09,200 with 4% cess. At ₹30 lakh you are also above the GST threshold. Compare regimes with our tax-regime calculator (choose "Business / other"). The return form is usually ITR-4; see which ITR form to file.

Common mistakes we see

Counting only Indian receipts towards ₹20 lakh. Exports and exempt income count too.
Not renewing the LUT in April, then raising export invoices without GST.
Charging GST before registration, or failing to charge it afterwards.
Skipping nil returns.
Reporting one turnover in GST returns and another in the income-tax return. The department sees both in your AIS.

FAQ

Is GST required for freelancers in India?

Only after your aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura), or if you are liable to pay GST under reverse charge. Below that, registration is optional, even for inter-state and foreign clients.

Do I need a GST number as a freelancer with only foreign clients?

Not while your total turnover, including export receipts, is within ₹20 lakh. Above it you must register, and you can then export without charging GST by filing an LUT in Form GST RFD-11 each financial year.

Can I register for GST voluntarily?

Yes. It helps when clients want a GST invoice or you want input tax credit. Once registered you must charge GST to Indian clients and file every return, even below ₹20 lakh.

Does GST registration change my income tax?

No. Income tax is computed separately. Many professionals use the presumptive scheme (Section 58 of the Income-tax Act, 2025, formerly s.44ADA), which taxes 50% of gross receipts up to ₹50 lakh, or ₹75 lakh when cash receipts are 5% or less.

Sources: GST portal: LUT user guide; Notification 10/2017-Integrated Tax (TaxGuru); ClearTax: registration limits; ClearTax: composition scheme; TaxGuru: Section 58. All checked 19 Sep 2026. Education only, not tax advice for your situation.

Sunil Kumar Palika

Co-founder, Tax & Compliance · About