GST (Goods and Services Tax) applies not just to goods but to most services in India. Whether you are a freelancer charging clients, a consultant raising invoices, or a business paying for software subscriptions, understanding which GST rate applies to your service and how to calculate it correctly is essential for proper invoicing and compliance.
GST Rates on Common Services in India
| Service Type | GST Rate | Notes |
|---|---|---|
| Professional fees (CA, lawyer, consultant) | 18% | Most professional services |
| IT services and software | 18% | SaaS, software development, IT support |
| Advertising services | 18% | Digital, print, outdoor ads |
| Restaurant (AC) | 5% | No input tax credit |
| Restaurant (non-AC) | 5% | No input tax credit |
| Hotel accommodation (above Rs 7,500/night) | 18% | Below Rs 7,500 attracts 12% |
| Healthcare and medical | 0% | Exempt from GST |
| Education services | 0% | Exempt from GST |
| Banking and financial services | 18% | Includes insurance |
| Rent (commercial property) | 18% | Residential rent exempt |
GST on Professional and Consulting Fees
If you are a CA, lawyer, architect, doctor (for non-healthcare services), management consultant, or IT professional, your services are taxed at 18% GST. This means for every Rs 10,000 you charge:
- GST amount = Rs 1,800 (18%)
- For intrastate: CGST Rs 900 + SGST Rs 900
- For interstate: IGST Rs 1,800
- Total invoice value = Rs 11,800
Use our free GST calculator to instantly calculate GST for any service amount.
GST for Freelancers — When Do You Need to Register?
GST registration is mandatory for freelancers and service providers when annual turnover exceeds Rs 20 lakhs (Rs 10 lakhs for special category states like J&K, Uttarakhand, Himachal Pradesh).
If you provide services to clients outside India (exports), GST registration is mandatory regardless of turnover — but export of services is zero-rated, meaning you charge 0% GST but can claim input tax credit refunds.
How to Calculate GST on Services
For adding GST to your service fee: GST Amount = Service Fee x GST Rate / 100. Total = Service Fee + GST Amount.
For reverse calculation (removing GST from a GST-inclusive amount): Original Fee = GST-inclusive amount / (1 + GST Rate/100).
Example: Your consulting fee is Rs 50,000 + 18% GST. GST = Rs 9,000. Total invoice = Rs 59,000. Client pays Rs 59,000. You deposit Rs 9,000 to government. Use our GST calculator to do this instantly.
Input Tax Credit on Services
If you are GST registered, you can claim Input Tax Credit (ITC) for GST paid on services you use for your business. For example, if you pay Rs 18,000 GST on a Rs 1 lakh software subscription, you can offset this against GST you collect from clients.
ITC cannot be claimed on: personal expenses, food and beverages, club memberships, health insurance for employees (except mandatory insurance), and travel for personal purposes.
How to Raise a GST-Compliant Invoice
Every GST invoice must include: your GSTIN, invoice number, invoice date, client name and GSTIN (if registered), description of service, taxable value, GST rate and amount (separately showing CGST + SGST or IGST), and total payable amount.
Use our free invoice generator to create professional GST-ready invoices and our GST calculator to get the exact tax amounts right.