How a Freelancer Get ₹25,000

Last month, Neha (name changed), a freelance graphic designer from Pune, walked into our office frustrated and confused. She had been paying GST on her services to international clients for over a year but had no idea she was eligible for refunds.

Here's how we turned her frustration into a ₹25,000 refund—and what every freelancer can learn from her story.

📉 The Problem: Money Left on the Table

Neha's Situation:

• Freelance graphic designer working with clients in the US and UK

• Annual turnover: ₹28 lakhs

• GST-registered since 2023

• Exporting 100% of her services and receiving payment in USD

The Issue: Despite earning entirely from exports, Neha was:

• ✅ Charging 18% GST on invoices to foreign clients

• ✅ Paying GST on business expenses (software subscriptions, equipment, courses)

• ❌ Not claiming any refunds on the GST she paid

The Impact: Over 15 months, she had accumulated input tax credit (ITC) worth ₹25,000+ sitting unused in her GST ledger. She simply didn't know she could get this money back.

🔍 The Discovery: Unclaimed Benefits

During our initial consultation, we reviewed her GST returns and immediately spotted the problem:

What We Found:

1. ₹42,000 in accumulated ITC from:

   • Adobe Creative Cloud subscription

   • Laptop and iPad Pro purchases

   • Business internet connection

   • Marketing and advertising expenses

   • Professional courses and certifications

2. Zero-rated supplies: Her services qualified as "export of services" under GST law

3. No refund applications filed: She had never claimed refunds despite being eligible

The Realization: Neha was essentially giving the government an interest-free loan of her hard-earned money!

💡 The Solution: Strategic GST Planning

We created a clear action plan for Neha:

Step 1: Filing Letter of Undertaking (LUT)

We filed Form GST RFD-11 (LUT) on her behalf, which allowed her to:

• Export services without paying IGST going forward

• Claim refunds on accumulated ITC

Timeline: Approved within 3 working days

Step 2: Refund Application Filing

We prepared and filed Form GST RFD-01A for refund of accumulated ITC, ensuring:

• All invoices were properly documented

• Bank statements showed foreign currency receipts

• Export documents were in order

• Calculations were accurate and supported

Documents We Organized: ✅ Export invoices with foreign client details ✅ Bank statements showing SWIFT/foreign remittances ✅ Purchase invoices for all GST-paid expenses ✅ Chartered Accountant certificate for refund claim ✅ Shipping bills/proof of export (where applicable)

Step 3: Follow-up and Compliance

We actively tracked the refund application through the GST portal and responded promptly to:

• Queries from the GST officer

• Requests for additional documentation

• Verification calls from the department

🎯 The Result: ₹25,000 Refunded

Timeline:

• Week 1: LUT filed and approved

• Week 2: Refund application submitted with all supporting documents

• Week 5-6: GST officer verification and queries

• Week 8: Refund of ₹25,000 credited to Neha's bank account!

Neha's Reaction: "I had no idea I could get this money back! I thought GST was just another tax I had to pay and forget about. This refund is almost a month's income for me. Thank you for showing me what I was missing!"

📚 Key Lessons for Freelancers

1. Export of Services = Zero-Rated Supply

If you're providing services to clients outside India and receiving payment in convertible foreign exchange, your supply is zero-rated. This means:

• You don't charge GST on exports (after filing LUT)

• You can claim refunds on GST paid on business expenses

2. File LUT Immediately

Don't make Neha's mistake! File your Letter of Undertaking (Form RFD-11) as soon as you register for GST if you have foreign clients.

Benefits:

• No need to pay IGST upfront and then claim refund

• Simplified cash flow management

• Faster working capital cycle

3. Maintain Proper Documentation

For successful refund claims, you MUST have:

• Export invoices clearly mentioning "Export of Services"

• Bank statements showing forex receipts

• GST-compliant purchase invoices

• Proof that payment was received in convertible foreign exchange

4. Don't Let ITC Accumulate

File refund applications quarterly or at least twice a year. The longer you wait:

• The more documentation you need to organize

• The higher the risk of missing invoices or lost paperwork

• The more complex the refund application becomes

5. Common Eligible Expenses

As a freelancer, you can claim ITC on: ✅ Software subscriptions (Canva, Adobe, Microsoft, etc.) ✅ Laptops, computers, tablets, phones ✅ Internet and phone bills ✅ Co-working space rentals ✅ Professional courses and certifications ✅ Marketing and advertising expenses ✅ Cloud storage and hosting services

🚀 The Bigger Picture: Ongoing Benefits

After helping Neha get her refund, we set up a proactive GST management system for her:

What Changed:

1. Monthly ITC reconciliation: We now track all her business expenses eligible for ITC

2. Quarterly refund filings: She files for refunds every quarter instead of letting ITC pile up

3. Better invoicing: Her invoices now clearly mention export status and comply with all GST requirements

4. Cash flow improvement: By filing LUT, she doesn't block working capital in GST payments

Expected Annual Savings: Based on her average expenses, Neha can now claim approximately ₹35,000-40,000 in refunds annually—money that was earlier just sitting in her GST ledger.

⚠️ Common Mistakes Freelancers Make

Through Neha's case and hundreds of others, we've identified these recurring mistakes:

❌ Not registering for GST when earning above ₹20 lakhs ❌ Charging GST on exports instead of filing LUT ❌ Ignoring accumulated ITC and never filing refund claims ❌ Poor documentation leading to refund rejections ❌ Not maintaining proper export invoices with all required details ❌ Missing deadlines for refund applications (2 years from relevant date)

📊 Is This Applicable to You?

You can claim GST refunds if:

✅ You're a GST-registered freelancer ✅ You provide services to foreign clients (export of services) ✅ You receive payment in convertible foreign currency ✅ You have GST-paid business expenses (creating ITC) ✅ Your output supply is zero-rated (exports) while input supply has GST

Quick Self-Check:

• Do you invoice clients in USD/EUR/GBP?

• Do you receive payments via SWIFT/PayPal/Wise?

• Do you pay 18% GST on software, equipment, or services?

If you answered YES to all three → You're likely eligible for GST refunds!

🎯 Take Action Today

If you're a freelancer working with international clients, don't leave money on the table like Neha did for 15 months.

Immediate Steps:

1. Log in to the GST portal and check your accumulated ITC

2. File LUT (Form RFD-11) if you haven't already

3. Organize your export invoices and purchase bills

4. Consult a CA to file your refund application correctly

💬 Final Thoughts

Neha's story isn't unique. Hundreds of freelancers across India are unknowingly eligible for GST refunds but never claim them because:

• They don't know about the provision

• They find the process intimidating

• They lack proper documentation

• They think the refund amount is "too small"

But here's the truth: ₹25,000 might not sound huge to a corporation, but for a freelancer, it's significant income. It's money YOU already paid that belongs back in YOUR pocket.

Don't let lack of awareness cost you thousands every year.

Are you a freelancer working with international clients? Have you claimed your GST refunds? Drop a comment or DM me if you need guidance!

Let's make sure every freelancer gets the money they're entitled to. 💪

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