Freelancing has emerged as a new way of working for the upcoming employees. A Freelancer under GST is defined as an independent worker who earns on a per-job or per-task basis and pays tax accordingly. The work is typically short-term. The taxation is levied accordingly based on his service provided.

What is Freelancing?

Freelancing is an upcoming way of working where the person is not an employee but a contractor. A freelancer works for himself and is responsible for his work and employment. He is the sole person to manage his task. Working hours, Taxations, Payments, Client coordination, etc.

A freelancer has the freedom to choose his working hours, work from anywhere he likes, and have a better life of his own choice. There are certain limitations and freelancers are often part-time or full-time.

How does GST work for Freelancers?

A normal employee in a company is provided a salary and is thus not needed to pay the Indirect tax as the company pays it. This is not the case for freelancers or people who provide a service on their own like lawyers, accountants, etc. A freelancer in India is taxed based on the service they provide.

The value-added tax rate which is typically 18% is to be paid by the freelancers after the registration based on the kind of services provided. This taxation is applicable when the turnover is more than 20 lakhs (10 Lakhs in certain states) per annum. GST for Indian Freelancers is thus charged just like all businesses which sell their services.

Conclusion

The emergence of the Freelancing sector has led to the recent development of queries regarding the taxation policy. The freelancers being independent service providers come under the GST regime for selling services. Thus they need to fill GST taxes which a salaried employee doesn't.