Freelancers: How is Revenue estimated for testing Service Tax Applicability?

As a Freelancer, you may need to test if Service Tax is applicable to you.

How should one estimate Revenue for this purpose?

Add Gross Value of Invoices – Service tax is chargeable on gross receivable of your freelancing work. You can exclude values which are considered as exports since service tax is exempt on export of services. Aggregate the total invoices raised to your clients. These could be totals of invoices raised by you or amounts agreed to be paid to you. In case your freelancing services are not backed by an invoice or an agreement, you may find amounts credited to your bank account. These invoices should be gross values, and not net of any expenses.

Important to note that the invoices are aggregated whether or not payment has been received against these invoices.

Add up Values from all Services – The nature of freelancing work or services provided by you may be different, you may be coding for one client or providing technical advice to another client or testing software for others. However the aggregate value of all such services have to be considered (and not for each type of service).

Other Incomes – Only your receipts or value of services from freelancing work is considered for this purpose.


Hope this dispels any questions that you may have at the time of estimating your revenue for service tax applicability. Do comment or write to us or reach out to us for help!


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