Freelancers and consultants such as software developers, designers, digital marketers, writers, engineers, management consultants, and other professionals often provide services to clients located in different states or countries.

Under GST, determining the Place of Supply (POS) is crucial because it decides:

• Whether CGST and SGST or IGST will be charged.
• Whether the supply is intra-state or inter-state.
• Whether the service qualifies as an export of service.

The place of supply provisions for services are mainly covered under Sections 12 and 13 of the IGST Act, 2017. Section 12 applies where both the supplier and recipient are in India, whereas Section 13 applies where either the supplier or the recipient is located outside India.

Place of Supply When Both Parties Are in India

When a freelancer or consultant located in India provides services to a client who is also located in India, Section 12 of the IGST Act applies.

Services Provided to Registered Persons (B2B)

The general rule is:

Place of Supply = Location of Registered Recipient

Example

A freelancer in Delhi provides digital marketing services to a GST-registered company in Maharashtra.

• Supplier Location: Delhi
• Place of Supply: Maharashtra
• Nature of Supply: Inter-State
• GST Applicable: IGST
  

Services Provided to Unregistered Persons (B2C)

The place of supply is:

• Location of the recipient, where the recipient’s address is available on record.
• Location of the supplier, if the recipient’s address is not available.

Example

A consultant in Karnataka provides services to an individual customer in Tamil Nadu and maintains the customer’s address.

• Place of Supply: Tamil Nadu
• GST Applicable: IGST

If the customer’s address is not available, the place of supply will be Karnataka and CGST + SGST will generally apply.

Place of Supply When Client Is Outside India

When a freelancer or consultant in India provides services to a foreign client, Section 13 of the IGST Act applies. The general rule is:

Place of Supply = Location of Recipient of Service

If the recipient’s location is not available in the ordinary course of business, the place of supply will be the location of the supplier.

Export of Services

Many Indian freelancers work for clients in the USA, UK, Canada, Australia, and other countries.

A service may qualify as an export of service if the prescribed conditions under GST law are fulfilled, including that:

• Supplier is located in India.
• Recipient is located outside India.
• Place of supply is outside India.
• Payment is received in convertible foreign exchange or permitted Indian Rupees.
• Supplier and recipient are not merely establishments of the same person.

Export of services is treated as a zero-rated supply under GST.

A freelancer may export services:

• Under Letter of Undertaking (LUT) without payment of IGST, or
• By paying IGST and claiming refund, subject to conditions.

Special Place of Supply Rules

Certain services have specific place of supply provisions, such as:

• Services related to immovable property – location of the property.
• Services requiring physical performance – place where services are performed.
• Admission to events – place where the event is actually held.

Therefore, the general rule may not apply to every type of consultancy service.

GST Registration for Freelancers

Freelancers and consultants should evaluate GST registration requirements based on their turnover, nature of supply, and the applicable provisions.

A registered freelancer must:

• Issue GST-compliant invoices.
• File applicable GST returns.
• Maintain records of invoices and receipts.
• Maintain foreign inward remittance records for export services.
• Renew LUT annually where required.

Common Examples

Common Mistakes Made by Freelancers

• Charging the wrong type of GST.
• Not obtaining LUT for export services.
• Confusing income tax provisions with GST provisions.
• Not maintaining contracts and foreign payment records.
• Ignoring special place of supply rules.

Proper documentation, agreements, invoices, and payment evidence are essential to claim GST benefits and avoid future disputes.

Conclusion

For freelancers and consultants, the place of supply is one of the most important concepts under GST because it determines the correct tax to be charged. Generally, domestic B2B services follow the recipient’s location, while international services follow the foreign recipient’s location under the IGST Act.

Freelancers serving overseas clients can enjoy the benefit of zero-rated exports, subject to fulfillment of prescribed conditions. Understanding place of supply rules and maintaining proper GST compliance helps professionals avoid notices, penalties, and unnecessary tax liabilities.

📲 Stay Connected & Learn More

👉 Join our WhatsApp Channel for daily tax & compliance updates:
🔗 https://whatsapp.com/channel/0029VaAOrtiFCCoQlhtGIx2o

👉 Explore more informational content on our YouTube Channel:
🔗 https://www.youtube.com/@taxajca

📞 Reach out via Call or WhatsApp: +91 8802912345