GST & TDS for freelancer payment

Please explain nature of your business. Then only, can give you a solution. 

If your business provide graphic designing service to your clients, you should raise GST tax invoice in RCM method which means, you can make GST payment directly to Government.

Or if it is an expenses you made on your business, you can deducted TDS 10% on contract or technical service then pay to freelancer. Get Non - Tax from freelancer for their service and make payment against it.

I provide Digital Marketing Services to my client and raise GST bills to my client for the services.

At the backend I get my work outsourced by freelancers to whom I require to pay for their services but they do not have GST.

So, my query is as follows:

- How I can record this payment in my company record? As Expense or Vendor Payment?
- Does GST will be involved in the payout I have to do to my freelancer?
- Do I need to deduct TDS for the payout? And if yes then it will come under 2% as technical service?
 

As a service provider, you should raise GST invoice in RCM method. Add freelancer as your vendor, then deduct TDS on 10%  professional service, 2% on technical service. 

Whenever, you received service from unregistered person, you won't get tax invoice so, you raise invoice yourself with reference no. If you are using any accounting software enable RCM for this unregistered technical service @ 18%, the software automatically calculate your GST amount. 

You should deduct TDS on taxable value of your freelancer amount. For Instance GST invoice, your freelancer bill Rs.30,000/- *18% RCM Rs.5400/- = Rs.35,400/- you GST Tax Invoice.

You should deducted TDS on Rs.30,000/- *2% Rs.600 = Balance Rs.29,400/- you should make payment to your freelancer.

1) Create your freelancer as your vendor.

2) You shouldn't collect GST from your freelancer. You are service receiver in this transaction. Your freelancer is service provider. 

3) For technical service TDS 2%

Thanks a lot for the guidance.
I'm just repeating below what understanding I got from the above details shared, to avoid any chances of confusion.

- I can't collect GST from non-GST registered Individuals or businesses.
- I need to pay GST for the bill I received from a non-GST entity directly to the government via a reverse charge mechanism and then can claim ITC.
- I need to deduct TDS while paying an amount to the non-gst entity and need to pay that TDS to govt. 


Thanks again for quick responses..

You mean I can't submit GST on the payment I will do to the freelancer?

So I can pay them without involving GST in place? 

Yes, 44ADA can apply to your consulting income even if you also have a salary job. The two income types are reported separately in ITR-4: salary income goes into the Schedule S, and consulting income is declared as presumptive professional income under 44ADA at 50% of gross receipts.
The only limit is that your total consulting receipts must be below Rs 50 lakh (or Rs 75 lakh if 95% of receipts are through banking channels). The key benefit is that you avoid maintaining separate books of accounts for the consulting side of your income.