Applicability of GST on freelancers

#Q.1) Whether a ‘Freelancer’ is liable to be registered under GST law?

Mandatory registration needs to be obtained under GST law in the following situations:

  • When the turnover crosses the threshold limit of Rs. 20 lacs (general cases)
  • When the turnover crosses the threshold limit of Rs. 10 lacs (specific cases of North-east states)
  • For services covered under Online Information and Database Access and Retrieval services (‘OIDAR’)

#Q.2) What are OIDAR services?

Under the GST Act, OIDAR services include the following:

  • Advertising on internet
  • Providing cloud service
  • Provision of e-books, music, movie, software and other intangibles via the internet
  • Providing data or information, retrieval or otherwise to any person in electronic form through a computer network
  • Online gaming

#Q.3)Whether composition scheme is applicable to a freelancer?

As per the GST Act, composition scheme is not applicable to a service provider except a service provider providing restaurant service. 

#Q.4) What would be the rate of tax applicable?

The  freelancing services will be taxed at the 18% tax rate.

#Q.5) Is the service provider eligible for input?

The freelancer  is allowed to take the input tax credit of the services used by him for the purpose of rendering service.

For example, freelancer can take input tax credit on purchase of office equipment to provide taxable service.

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