Background: –

In India, Goods and Services Tax (GST) is applicable to the services provided by freelancers. As per the GST law, freelancers are considered to be providing services in the course or furtherance of business, and hence, their services are subject to GST. If the annual turnover of a freelancer exceeds the threshold limit of INR 20 lakhs (INR 10 lakhs for some special category states), they are required to register for GST. This is to be noted that in case of export of services, Registration under GST is required by each freelancer or service provider irrespective of Turnover.

Once registered, they must collect and pay GST on their taxable services at the applicable rate. The GST rate on freelance services in India is 18%. However, certain services may attract a lower rate of GST or may be exempt from GST altogether.

Export of services: –

If you are a freelancer or a business providing services and you want to export those services from India, you need to register for Goods and Services Tax (GST). Export of services is treated as zero-rated supply under GST, which means that no GST is charged on such supplies subject to filing of letter of undertaking (LUT) to the GST Department.

Every supply of service made to a person belonging to the outside India and payment also received in convertible foreign exchange cannot be termed as supply of export of service.

 Export of service is defined under section 2(6) of the IGST Act which is reproduced as under: – “export of services” means the supply of any service when, —

• the supplier of service is located in India;
• the recipient of service is located outside India;
•  the place of supply of service is outside India;
•  the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
• the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

Under the Goods and Services Tax (GST) regime in India, the export of goods and services is considered as a zero-rated supply. This means that no GST is charged on the export of goods or services, but the exporter can claim input tax credit (ITC) for GST paid on inputs and input services.

To export goods or services without paying GST, the exporter needs to either:

• Furnish a Letter of Undertaking (LUT): If the exporter has a track record of exports and meets certain conditions specified under the GST laws, they can furnish an LUT instead of paying GST on the export of services. The LUT is a written undertaking by the exporter that they will comply with all the GST rules and regulations, and that they will pay the GST in case of any non-compliance.
• Pay the GST and claim refund: If the exporter is not eligible to furnish an LUT or chooses not to furnish an LUT, they can pay the GST on the export of services and then claim a refund of the same.

When a registered person exports goods or services under an LUT, they are not required to pay any GST on such exports. However, they are required to file GST returns to claim the input tax credit and maintain proper records of their exports.

On the other hand, if a registered person exports goods or services without furnishing an LUT, they are required to pay the applicable GST on such exports. They can claim a refund of the GST paid by filing a refund application with the GST department.

GST Return Filing for Export of services:-

Under the Goods and Services Tax (GST) regime in India, exporters of services are required to file GST returns on a regular basis. The GST return filing process for exports of services is as follows:

1. GSTR-3B: Every registered person is required to file GSTR-3B on a monthly or quarterly basis. In case of exports of services, the exporter needs to report the details of exports made during the tax period in Table 3.1(d) of GSTR-3B.
2. GSTR-1: Every registered person is required to file GSTR-1 on a monthly or quarterly basis, which contains details of outward supplies made during the tax period. In case of exports of services, the exporter needs to report the details of exports made during the tax period in Table 6A of GSTR-1.
3. Invoice details: For exports of services, the exporter needs to maintain proper records of invoices issued for the services exported, along with the relevant documents like shipping bills, airway bills, and bank realization certificates.
4. Refund of GST paid: If the exporter has paid GST on the export of services and has not furnished an LUT, they can claim a refund of the same by filing a refund application in Form GST RFD-01.