GST for Freelancers and Small Businesses

Do foreign clients require GST on invoices?

Services exported outside India can be zero-rated under GST when conditions are met—place of supply, receipt in convertible foreign exchange (or permitted currency), and proper LUT/Bond where applicable. Maintain contract copies, SWIFT advices or payment proofs, and file returns correctly. Consult the latest notifications for your category to avoid disputes.

What is the composition scheme?

The composition scheme simplifies compliance for small businesses by offering lower tax rates with restrictions on inter-state supplies and input tax credit. It’s generally not suited to service categories beyond specified limits. Evaluate thresholds, invoicing rules and the inability to claim ITC before opting in. Many freelancers prefer regular registration to avail input credits on tools and services.

How should I raise a GST invoice?

Include GSTIN, invoice number and date, client details, place of supply, HSN/SAC codes, description, quantity/value, tax rate and amount breakdown (CGST/SGST/IGST). For exports, include LUT/Bond references and currency conversion notes. Use consistent invoice series and maintain digital backups. Accuracy here reduces filing friction and audit risks.

Which returns do I file and when?

Return forms and frequencies can change; verify current forms applicable to your registration type. File on time to avoid late fees and interest. Reconcile outward supplies with client records. If you discover mistakes, use amendment mechanisms promptly rather than letting discrepancies accumulate.

Can I claim input tax credit (ITC)?

Regular registrants can claim ITC on eligible business expenses when vendor invoices carry valid GST details and the supplies are used for business. Ensure vendor compliance to avoid ITC denial. Keep invoices organized by month, match GSTR data and avoid personal expense mixing to maintain clean records.

How do inter-state supplies work?

Inter-state supplies may attract IGST and different registration considerations. Confirm place-of-supply rules, especially for digital services delivered online. If you frequently work with clients across states, set processes for correct tax head selection and filing.

Common mistakes freelancers make?

Missing invoices, incorrect SAC codes, late filings, and poor documentation. Another frequent issue is not reconciling bank credits with invoices. Create a monthly checklist: raise invoices, record receipts, file returns, reconcile, and archive documents. This routine keeps your GST journey smooth.

Any practical tools to stay compliant?

Use invoicing apps with GST fields, maintain a cloud folder for month-wise documents, and set calendar reminders for returns. For rate calculations, use our GST Calculator. If unsure, consult a tax professional during setup to avoid foundational errors.