In the era of GST, Freelancers providing taxable services are required to get registered under GST (if exceeding the exemption limit) and pay tax on the services provided. GST has made both the positive and negative influence or impact on Freelancing industry as discussed below :

Positive Influence on Freelancing :

• Freelancers will be eligible to avail the credit of inputs held in stock in situations where the freelancer is shifting from the exemption to the taxable category. Furthermore, this tax credit can be utilized for the payment of output GST liability in future.
• Under GST, freelancers shall be able to avail the basic exemption up to a turnover of Rs.20 lakhs.
• The Input Credit of CGST /SGST/ IGST paid at the time of purchase of Input goods as well as on Capital goods will be available for Goods and Service Tax regime.
• The cascading effect of service tax and VAT payable on sale of software by the freelancers providing online or offline software services is removed under GST thereby reducing the cost of software to customer.

Negative Influence on Freelancing :

• Freelancers needs to pay taxes even on free services even the service/supply made without consideration is liable to tax.
• Under GST, there is no concept of centralized registration for those who have different premises in different locations. Therefore, the freelancer service providers have to register themselves in each state from where they are providing services and pay CGST/SGST in that state respectively.
• The legal compliance burden is much higher under GST regime as freelancers have to file various returns per year from each location where the registration has been granted along with a compulsory audit by a licensed Chartered Accountant if the turnover exceeds the threshold limit.