Year two of going solo. Rohit added two US clients who pay him in USD. His Indian SaaS clients pay him in INR. Total receipts last FY: ₹18L. He's confused about whether GST changes for him now.
Three scenarios. Let's match Rohit to one.
- Mandatory if total annual receipts cross ₹20L (services threshold) — INR + foreign equivalent counts.
- Foreign clients alone don't trigger registration. But once you're registered, "export of service" rules let you bill at 0% via LUT.
- For India B2B clients: voluntary GST often helps — they prefer GST suppliers for ITC.
- Pure exporters often register voluntarily to claim refund on input GST (laptop, software, coworking).
Match yourself to one of these three
All Indian, < ₹20L
Most early freelancers
Not mandatory. Voluntary only if 70%+ clients are GST businesses who want ITC. Otherwise skip.
All overseas
USD / EUR receipts
Above ₹20L: mandatory. Below: optional but recommended — register, file LUT, claim refund on input GST.
Mixed
Rohit's case
Total receipts (INR + ₹-equivalent of foreign) count toward ₹20L. Each leg follows its own rule — INR with GST 18%, foreign as export at 0%.
How to invoice (once registered)
- Your GSTIN + client's GSTIN (if applicable)
- SAC code (6-digit, e.g. 998313 for IT consulting)
- Taxable value
- CGST + SGST (intra-state) OR IGST (inter-state) OR 0% with LUT ARN (export of service)
- Place of supply (state code; "96" for export)
- Invoice number (continuous series, FY-wise)
SAC codes — the common freelancer ones
18%. Default for backend / DevOps / IT consulting work.
18%. Front-end, UI engineering, full-stack web work.
18%. Branding, illustration, identity.
18%. Copywriting, content marketing, ad creative.
18%. Strategy, management, advisory.
Export of service — the 5-condition test
To qualify as "export of service" (zero-rated GST), all five must hold:
👉 Supplier in India (you)
👉 Recipient outside India
👉 Place of supply outside India
👉 Payment in convertible foreign exchange (USD / EUR / GBP, credited via banking channels)
👉 Supplier and recipient not establishments of the same person
Receiving via Wise / Payoneer / direct wire? FIRC (Foreign Inward Remittance Certificate) is straightforward — your bank issues it. Receiving via PayPal which converts to INR before paying you? PayPal-generated certificates may not be accepted by all officers as FIRC. For clean export-of-service compliance, receive directly to your bank.
LUT — the bond that lets you bill 0%
By default, export of services is "zero-rated" — but you'd have to pay IGST first and claim a refund. Painful.
LUT (Letter of Undertaking) is a one-time annual filing that lets you bill at 0% directly. No upfront IGST, no refund chase. See our LUT guide — it's 15 minutes online.
The voluntary GST trade-off — should Rohit register?
Pros
Why register
B2B clients prefer GST suppliers · Claim ITC on laptop/software/coworking · Refund on input GST (exporters) · Easier loan/visa documentation.
Cons
Why hold off
Monthly GSTR-1 + 3B (~30 min) · Adds 18% to India B2C bills · Late fees if you miss months · GSTR-9 annually (only above ₹2 cr).
Most freelancers should register somewhere between ₹15L and ₹20L turnover. Crossing the threshold mid-year is messier than registering proactively when you can see it coming.
Rohit's call
His receipts: ~₹18L INR + ~₹4L USD-equivalent = ₹22L. He's already over the ₹20L threshold. Registration is mandatory, not optional.
👉 Register on gst.gov.in (see the step-by-step).
👉 File LUT immediately so US clients invoice at 0% IGST.
👉 Set up monthly filing cadence — 11th GSTR-1, 20th GSTR-3B.
👉 Use input GST on his MacBook / Notion / Figma to reduce net liability.
Quick answers
Mandatory if total receipts (₹ equivalent) cross ₹20L. Below — not mandatory but recommended: register, file LUT, claim refund on input GST.
Service providers can opt for composition under Section 10(2A) if turnover ≤ ₹50L. Tax: 6% (3% CGST + 3% SGST). But you can't claim ITC and can't make inter-state supplies — bad for exporters.
No (when treating as export of service with LUT). Invoice at 0% IGST, mention LUT ARN. The US client pays only your fee in USD.
File Form RFD-01. Quarterly is common. Refund processed in 30-60 days typically. Keep all input invoices clean — they're the basis.
Marketplace withholding doesn't change your obligations. Threshold and registration rules apply on your gross receipts (before platform deduction). Most successful Upwork freelancers register voluntarily.
When you might want help
The basics are DIY-able. Where help pays off: classifying mixed India + overseas revenue correctly, picking SAC codes that match your actual deliverables (gets audited), filing the first LUT + refund cycle without errors, and a clean monthly filing cadence that doesn't eat your client work time.
Want your freelance GST handled?
Registration, LUT, monthly returns, refund filing — fixed monthly fee. You focus on clients.