1. Do you need to register?
For service providers, GST registration becomes compulsory when your aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh if you are in Manipur, Mizoram, Nagaland or Tripura. Aggregate turnover is everything you supply across India, including exports and exempt services, not just your domestic sales.
Export of services is treated as an inter-state supply, which normally requires registration whatever your turnover. However, people who supply services across states below the threshold are exempt from that requirement, so a freelancer exporting services worth less than ₹20 lakh a year does not have to register. Once you cross the threshold, apply within 30 days.
Not sure? Our GST Registration Checker works it out in under a minute.
2. Should you register voluntarily?
Registering before you have to has real advantages: you can claim credit for GST paid on your business purchases, exporters can get that credit refunded, and Indian business clients often prefer suppliers with a GSTIN. The cost is regular returns, even in months with no income, and late fees if you miss them. If almost all your income is from abroad and your expenses are low, the case for registering early is weaker.
3. When is it an export of services?
A supply counts as an export of services, and is zero-rated, only when all five conditions are met:
- you, the supplier, are located in India;
- your client is located outside India;
- the place of supply is outside India;
- you are paid in convertible foreign exchange, or in Indian rupees where the RBI permits it;
- you and your client are not merely establishments of the same person, such as an Indian branch and its foreign head office.
The place of supply rules have exceptions for some services, so if your work involves goods, events or property in India, check before treating it as an export.
4. File an LUT and export without GST
A Letter of Undertaking (LUT) lets you export services without paying IGST. You file it online on the GST portal in Form GST RFD-11, and it is valid for one financial year, so file a fresh one before your first export of each year. Without an LUT, you would have to pay IGST on exports and claim it back as a refund.
Each export invoice should state that the supply is meant for export under LUT without payment of IGST, and quote your LUT reference. Our Invoice Generator does this automatically.
5. Charging GST to Indian clients
Most professional, consulting and IT services are taxed at 18%. If your client is in your state, you charge CGST and SGST at 9% each; if they are in another state, you charge IGST at 18%. Issue the invoice within 30 days of supplying the service, and include your GSTIN, your client's GSTIN if they have one, and the SAC code.
6. Returns and due dates
Registered businesses file two main returns: GSTR-1, reporting sales, and GSTR-3B, summarising tax and paying it. You can file them monthly, or quarterly under the QRMP scheme if your aggregate turnover is up to ₹5 crore.
- Monthly: GSTR-1 by the 11th and GSTR-3B by the 20th of the following month.
- Quarterly (QRMP): GSTR-1 by the 13th of the month after the quarter, and GSTR-3B by the 22nd or 24th depending on your state. Tax for the first two months of each quarter is paid by the 25th of the following month.
- Annual return: GSTR-9 is due by 31 December. It is mandatory if your turnover exceeds ₹2 crore and optional below that.
File even if you had no sales. Our Compliance Calendar lists your own dates.
7. Input tax credit and refunds
GST you pay on business purchases, such as a laptop, software subscriptions or co-working rent, can be set off against the GST you collect. Exporters working under an LUT collect little or no GST, so their credit tends to build up; that unused credit can be claimed as a refund. The refund claim needs your export invoices, proof of payment such as e-FIRAs, and matching returns, so keep them in order.
8. Services you buy from abroad
If you are registered and pay a foreign supplier for services used in your business, such as design tools, hosting or consultants abroad, you usually pay the IGST yourself under the reverse charge, and then claim it back as input tax credit. It rarely costs you money, but it must be reported correctly.
9. Common mistakes to avoid
- Exporting without a valid LUT for the year
- Missing returns in months with no income
- Treating a service as an export when one of the five conditions is not met
- Not keeping e-FIRAs for foreign payments
- Charging the wrong tax (IGST instead of CGST and SGST, or the reverse)