{"id":1631,"date":"2017-08-29T10:17:11","date_gmt":"2017-08-29T10:17:11","guid":{"rendered":"https:\/\/swaritadvisors.com\/?p=1631"},"modified":"2020-12-17T18:10:00","modified_gmt":"2020-12-17T12:40:00","slug":"gst-hacks-for-startups-freelancers","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/gst-hacks-for-startups-freelancers\/","title":{"rendered":"GST Hacks for Startups &#038; Freelancers"},"content":{"rendered":"\n<p class=\"has-drop-cap\">It is beneficial to GST Online Registration if you are a service provider or a freelancer as there is an increase in the threshold limit under GST which will enable them to carry on the business smoothly. In this&nbsp;article, we will discuss&nbsp;<strong>GST for Freelancers<\/strong> and new Startups?<\/p>\n\n\n\n<p>GST has four different slab rates of <strong><em>5%, 12%, 18% and 28%.<\/em><\/strong> Initially, it may appear the t burden of tax has been increased on the service provider (as previously the rate of service tax under the Service Tax laws was 15%)<\/p>\n\n\n\n<p>However, the GST regime allows the service provider the benefit to claim the input tax credit on the goods and services both (as previously the service provider was allowed to take <strong>input tax credit<\/strong> only the services and not on the goods) this will lead to decrease in the cost of service<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a35b50bfb8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a35b50bfb8\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/gst-hacks-for-startups-freelancers\/#GST_for_Start-ups\" title=\"GST for Start-ups\">GST for Start-ups<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/gst-hacks-for-startups-freelancers\/#GST_for_Freelancers\" title=\"GST for Freelancers\">GST for Freelancers<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/gst-hacks-for-startups-freelancers\/#Tax_Liability_for_Freelancers_under_GST\" title=\"Tax Liability for Freelancers under GST\">Tax Liability for Freelancers under GST<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/gst-hacks-for-startups-freelancers\/#Comparison_under_Service_tax_and_GST\" title=\"Comparison under Service tax and GST\">Comparison under Service tax and GST<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GST_for_Start-ups\"><\/span>GST for Start-ups<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Due to the introduction of GST, the startups have a great opportunity to develop their business due to the increase in the threshold <strong><em>limit to Rs. 20 lakhs<\/em><\/strong> except those who are dealing with e-commerce sector ( as they have to mandatorily take <strong><a href=\"https:\/\/swaritadvisors.com\/gst-registration\" class=\"text-primary\">GST Registration Online in India<\/a><\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GST_for_Freelancers\"><\/span>GST for Freelancers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>GST will help the small freelancers to enrich their business as threshold limit has now been increased to Rs. 20 lakhs (except for northeastern states) as during the Service tax regime the free lancers were compulsorily required to take registration if their average earning is greater than Rs. 15 lakhs.<\/p>\n\n\n\n<ul><li>Service providers providing freelancing services in the form of interstate or his turnover is above Rs. 20 lakhs are required to take registration for each state separately.<\/li><li>Service providers can now claim the taxes paid by them on goods and services to settle their final tax liability.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_Liability_for_Freelancers_under_GST\"><\/span>Tax Liability for Freelancers under GST<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Freelancers whose turnover is above Rs. 20 lakhs are required to take GST registration for each state separately. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparison_under_Service_tax_and_GST\"><\/span>Comparison under Service tax and GST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td><strong>Under Service tax <\/strong><\/td><td>&nbsp;<\/td><\/tr><tr><td>1)&nbsp;&nbsp;&nbsp; ABC Ltd. provides services to X for an amount of Rs 50, 00,000.\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>2)&nbsp;&nbsp;&nbsp; ABC Ltd. Has also paid tax on the goods purchased of Rs. 5,00,000 for providing the services (Input Tax credit Rs. 75000)<\/p>\n<\/td><td>\n<ul>\n<li>&nbsp;ABC Ltd. Service tax liability comes to Rs.750000 including SBC and KKC @ 0.5%<\/li>\n<li>Input tax credit of Rs. 72500 (75000 \u2013 0.5% of Rs.500000) will be allowed<\/li>\n<li>SBC is not allowed as a credit<\/li>\n<li>Thus the final tax liability comes to Rs. 677500<\/li>\n<\/ul>\n<\/td><\/tr><tr><td><strong>Under GST<\/strong><\/td><td>&nbsp;<\/td><\/tr><tr><td>1)&nbsp;&nbsp;&nbsp; ABC Ltd. provides services to X for an amount of Rs 50, 00,000.\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>2)&nbsp;&nbsp;&nbsp; ABC Ltd. Has also paid tax on the goods purchased of Rs. 5,00,000 for providing the services (Input Tax credit Rs. 75000)<\/p>\n<\/td><td>\n<ul>\n<li>ABC Ltd. GST liability comes to Rs. 900000<\/li>\n<li>Input tax credit comes that can be claimed comes to Rs. 90000.<\/li>\n<li>The final tax liability comes to Rs. 810000<\/li>\n<\/ul>\n<\/td><\/tr><\/tbody><\/table>\n\n\n\n<p>Thus from the above comparison, the <em>final tax liability under Good &amp; Service Tax has increased to Rs. 132500<\/em>. Also, the service provider will get the benefit of input tax credit paid on the inputs which were not allowed under the old service tax regime.<\/p>\n\n\n\n<p>Thus it will make the service industry more regulated and organized. Besides the freelancers operating on a small scale under GST and benefited through an increase in the threshold limit<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/basics-of-gst-appeals-revisions\/\">Basics of GST Appeals and Revisions<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>It is beneficial to GST Online Registration if you are a service provider or a freelancer as there is an increase in the threshold limit under GST which will enable them to carry on the business smoothly. In this&nbsp;article, we will discuss&nbsp;GST for Freelancers and new Startups? GST has four different slab rates of 5%, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1551,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[283],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/1631"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=1631"}],"version-history":[{"count":6,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/1631\/revisions"}],"predecessor-version":[{"id":17965,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/1631\/revisions\/17965"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/1551"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=1631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=1631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=1631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}