Lance Support & Knowledge Base

For most states in India, the threshold is ₹20 Lakhs in a financial year. However, if you are exporting services outside India, mandatory registration may apply regardless of turnover.

RCM shifts the GST payment liability from the freelancer to the client. The tax is calculated on the invoice for compliance, but the client pays it directly to the government.

Yes. If you want to export your services without paying 18% IGST upfront, you must file an LUT with the GST portal for the current financial year and explicitly cite your LUT number on your invoice.

Generally, no. However, if you are providing services to clients outside your home state (inter-state) or exporting services internationally, GST registration is often required regardless of your turnover limit.

The most common SAC (Services Accounting Code) for software development, frontend architecture, and IT consulting in India is 998314. For graphic design and branding, it is typically 998391.

No. A standard digital invoice is valid without a wet signature as long as it includes a computer-generated document disclaimer stating that a physical signature is not required.

A B2B (Business-to-Business) invoice includes the client’s GSTIN, allowing them to claim Input Tax Credit (ITC). A B2C (Business-to-Consumer) invoice is for unregistered clients and does not require the buyer’s GSTIN.

Yes. If you are billing an international client, you can generate your invoice in USD, EUR, or GBP. However, for Indian compliance, the amount received must be realized in INR through authorized banking channels.

If the invoice has already been sent and filed, you cannot simply delete it. You must issue a Credit Note to cancel the original invoice value, and then generate a new, corrected invoice with a new unique invoice number.

An MSA (Master Services Agreement) outlines the general, long-term rules of your working relationship (like payment terms and IP transfer). An SOW (Statement of Work) defines the specific deliverables and price for a single project.

A kill fee is a non-refundable percentage of the total project cost paid by the client if they cancel the project before completion. It protects the freelancer for the time and resources already invested.

Unless stated otherwise in your contract, IP rights remain with the creator. Best practice is to include an IP Transfer Trigger in your MSA that states IP and source files are only released to the client upon full and final payment of all invoices.

Under Section 194J of the Income Tax Act, Indian clients are required to deduct 10% Tax Deducted at Source (TDS) on payments made for professional or technical services.

A FIRC (Foreign Inward Remittance Certificate) is a document acting as proof of a foreign money transfer to India. It is crucial for freelancers to prove to the GST department that their international payment was a valid export, exempting them from IGST.

While possible for small, occasional amounts, the RBI strongly recommends routing business payments through a Current Account. This ensures proper FEMA compliance, smoother FIRC generation, and prevents your account from being flagged.

Industry standard for freelance contracts is typically a 1.5% to 2% penalty per month on the outstanding balance. However, this must be explicitly stated in your Master Services Agreement (MSA) or invoice terms before the project begins to be legally enforceable.

Supplies to an SEZ unit are treated as zero-rated supplies (similar to exports). You can supply services under an LUT without charging IGST, but your invoice must explicitly state: "Supply to SEZ Unit for authorized operations under LUT".