Freelancers provide various services across India – content writing, consulting, design, marketing, programming, etc. With the recent major reform in the Goods and Services Tax (GST) regime, many rules have changed. This guide helps you understand how these reforms affect freelancers, what you need to do, and how to stay compliant under the new law structure effective from 22 September 2025.
Latest GST Law Changes (2025) Relevant for Freelancers
The 56th GST Council Meeting introduced significant changes to simplify GST and bring relief to consumers and businesses. Here are the highlights:
- The earlier four-tier GST structure of 5%, 12%, 18%, and 28% has been rationalized into two main slabs:
- 5% (merit rate)
- 18% (standard rate)
- A new 40% slab has been introduced for sin and luxury goods/services.
- Goods and services like health insurance and life insurance are now fully exempt from GST (0%).
- Beauty and wellness services such as salons, gyms, and spas now fall under the 5% slab, down from the previous 18%.
- The reforms take effect from 22 September 2025.
- Thresholds for registration remain ₹20 lakhs for most states and ₹10 lakhs for special category states.
These reforms aim to simplify GST compliance and reduce tax burdens on essential goods and services.
How These Changes Impact Freelancers
- Service Classification
- Determine whether your freelancing services fall under 5%, 18%, or 40% based on the new classification.
- Invoice Dates and Rates
- Invoices issued before 22 September 2025 follow the old rates.
- Invoices issued on or after 22 September 2025 must follow the new rate slabs.
- Registration Thresholds
- If your annual turnover exceeds ₹20 lakhs (₹10 lakhs for special states), GST registration is mandatory.
- Voluntary registration is recommended for those dealing with exports or registered businesses.
- Input Tax Credit (ITC)
- Registered freelancers can claim ITC for GST paid on business expenses such as software, subscriptions, and professional equipment.
Relevant GST Law Sections & Notifications
- Section 9, CGST Act, 2017: Levy and collection of GST.
- Sections 22 & 24, CGST Act, 2017: Threshold limits and compulsory registration requirements.
- Section 16, IGST Act, 2017: Zero-rated export of services with LUT filing.
- Latest Notifications (September 2025): PIB releases and GST Council announcements outlining the revised rate structure.
Example: GST Calculation for Freelancers in 2025
Scenario 1: Content Writer – Standard Professional Service
- Total turnover after 22 September 2025: ₹7,00,000
- GST rate applicable: 18%
GST payable = ₹7,00,000 × 18% = ₹1,26,000
Scenario 2: Beauty and Wellness Service Provider
- Total turnover after 22 September 2025: ₹2,00,000
- GST rate applicable: 5%
GST payable = ₹2,00,000 × 5% = ₹10,000
Scenario 3: Luxury Service Provider
- Total turnover: ₹5,00,000
- GST rate applicable: 40%
GST payable = ₹5,00,000 × 40% = ₹2,00,000
Step-by-Step Guide for Freelancers under New GST Rules
Step 1: Determine Service Category
- Verify if your service falls under 5%, 18%, or 40% using the latest GST notifications.
Step 2: Assess Date of Supply
- Identify whether the invoice or service date is before or after 22 September 2025 to apply the correct rate.
Step 3: Apply for GST Registration (if needed)
- File GST REG-01 through the GST Portal.
Step 4: Raise GST-Compliant Invoices
- Include:
- GSTIN
- SAC code
- Date of invoice
- Correct GST rate
- Total taxable value
Step 5: File GST Returns
- GSTR-1: For outward supplies (monthly or quarterly).
- GSTR-3B: Monthly summary return.
- GSTR-9: Annual return (if applicable).
Step 6: Pay Taxes and Claim ITC
- Use GST PMT-06 to generate challans.
- Keep receipts and invoices for ITC claims.
Key Deadlines for 2025
| Compliance Activity | Due Date |
|---|---|
| GSTR-3B Filing | 20th of every month |
| GSTR-1 (Monthly) | 11th of every month |
| GSTR-1 (Quarterly) | Last day of next month after quarter |
| GSTR-9 (Annual Return) | 31st December 2025 |
Conclusion
The 2025 GST reforms simplify the tax structure for freelancers:
- Most services now fall under either 5% or 18%.
- Beauty and wellness services benefit from reduced GST at 5%.
- Luxury or demerit services are taxed at 40%.
- Registration thresholds remain unchanged, but compliance accuracy is critical.
- Always ensure invoices reflect the correct rate and service classification.
Call to Action
If you are unsure about your GST obligations or need help with registration, filing, or compliance, schedule a consultation with Anshul Goyal, Chartered Accountant, by visiting:
https://calendly.com/anshulcpa/
Disclaimer
This article is authored by Anshul Goyal, Chartered Accountant, licensed with ICAI India. The content is for educational purposes only and should not be considered professional advice. Consult a qualified tax professional for your specific situation.
FAQs on GST for Freelancers (2025)
Q1. Do I need to change my GST rate for services already invoiced before 22 September 2025?
No, older invoices remain under old rates. New rates apply to invoices issued on or after 22 September 2025.
Q2. What GST rate applies to content writing or consulting services?
These fall under 18%, unless specifically mentioned in the merit list for 5%.
Q3. Are salon and wellness services now cheaper?
Yes, their GST rate has been reduced to 5% from the earlier 18%.
Q4. Are life and health insurance policies taxed under GST now?
No, they are now fully exempt (0%) under GST.
Q5. How do I know if my service falls under the 40% slab?
This applies only to explicitly listed luxury or demerit services. Check the GST Council notifications.