GST for Freelancers in India: The Complete 2026 Guide
Do freelancers need GST in India? What about export clients? This is the complete, no-jargon 2026 guide — thresholds, LUT, invoicing, returns and the rules that save you tax.
GST is the #1 thing Indian freelancers get wrong — and it costs them either lakhs in unnecessary tax, or worse, a future notice from the department. The good news: the rules are actually simple once you separate domestic clients from export clients.
Here is the complete, no-jargon 2026 guide — when to register, what to charge, how to invoice, and the LUT trick every export freelancer must know.
TL;DR
Register for GST once you cross ₹20L revenue (₹10L in special states), or sooner if you serve foreign clients and want to claim refunds. Charge 18% on Indian clients. Charge 0% on foreign clients — but only if you file an LUT first.
When do you actually need GST?
- Mandatory: Annual revenue above ₹20L (₹10L for special-category states like Manipur, Mizoram, Nagaland, Tripura).
- Mandatory: Inter-state supply of services (some exceptions for services exempt under notification).
- Voluntary (recommended): If most of your clients are foreign, register early — you can claim refunds on GST paid for your software, tools and laptop.
Domestic vs export clients — the full table
| Client type | GST rate | What to charge / file |
|---|---|---|
| Indian client, same state | 18% (CGST 9% + SGST 9%) | Add GST to invoice. Pay to govt. |
| Indian client, other state | 18% IGST | Add IGST to invoice. Pay to govt. |
| Foreign client (with LUT) | 0% (zero-rated) | No GST charged. Claim input refund. |
| Foreign client (no LUT) | 18% IGST upfront | Pay first, refund later. Painful. |
| OIDAR / B2C foreign | Special rules | Consult a CA |
The LUT — the one filing every export freelancer must do
If you have foreign clients, file a Letter of Undertaking (LUT) on the GST portal at the start of every financial year. It's free, takes 10 minutes, and lets you invoice foreign clients without charging 18% IGST.
Without an LUT, you must pay 18% IGST upfront on every foreign invoice and then claim it back as a refund — a months-long process that locks up your cash.
What your GST invoice must contain
- Your name, address and GSTIN
- Client's name, address and GSTIN (if registered)
- Invoice number (continuous, not skipping) and date
- HSN/SAC code (998313 for IT services, 998314 for consulting)
- Taxable value, GST rate, GST amount, total
- For exports: "Supply meant for export under LUT — without payment of IGST"
Which returns you actually file
→ GSTR-1 — monthly (or quarterly under QRMP). Lists every invoice you issued.
→ GSTR-3B — monthly. Summary of tax payable + paid.
→ GSTR-9 — annual reconciliation (only if turnover > ₹2 Cr).
→ LUT — once at the start of every financial year (April).
Income tax + GST — the combined strategy
Under ₹20L revenue? Skip GST. File under Section 44ADA (50% presumptive) for income tax.
₹20L–75L mostly Indian clients? Register for GST. Charge 18%. Still file 44ADA for income tax.
Mostly foreign clients? Register early. File LUT. Claim input refunds. 44ADA still applies for income tax up to ₹75L.
Mistakes that cost freelancers the most
- Not filing LUT — pays 18% IGST on every foreign invoice unnecessarily.
- Skipping returns after registering — late fees of ₹50/day per return, capped at ₹10K.
- Not collecting FIRC / FIRA from your bank for foreign payments — required as proof of export.
- Confusing income tax and GST — they are completely separate. Section 44ADA is income tax. GST is a separate filing.
This guide is for educational purposes only and is not a substitute for advice from a qualified chartered accountant. Tax rules and thresholds change — always confirm current rates with your CA before filing.
Frequently Asked Questions
Do freelancers in India need to register for GST?
Only if your annual revenue crosses ₹20 lakh (₹10 lakh in special-category states like Manipur, Mizoram, Nagaland, Tripura), or if you supply services across states under taxable categories. Freelancers with mostly foreign clients often register voluntarily to claim input tax refunds.
What GST rate applies to freelance services in India?
Most freelance services (IT, design, writing, consulting, marketing) attract 18% GST — split as 9% CGST + 9% SGST for same-state clients, or 18% IGST for inter-state clients. For foreign clients with a valid LUT in place, the rate is 0% (zero-rated export).
What is an LUT and do I need it as a freelancer?
A Letter of Undertaking (LUT) is a once-a-year GST filing that lets you invoice foreign clients without charging 18% IGST. If you serve any foreign clients and are GST-registered, file an LUT every April. Without it, you must pay 18% IGST upfront on each foreign invoice and claim it back as a refund.
Can I use Section 44ADA and still charge GST?
Yes — they are completely separate. Section 44ADA is an income tax presumptive scheme (50% of revenue treated as profit) and applies up to ₹75 lakh turnover. GST is a separate indirect tax. Most Indian freelancers above ₹20L use both simultaneously.
What is the HSN/SAC code for freelance services?
Most IT and software freelance services fall under SAC 998313. Management or business consulting falls under 998314. Design services typically fall under 998391. Always confirm the right code with your CA — it must appear on your GST invoice.