GST on Services: Rate List for Common Services

GST on services is simpler than the long rate notifications suggest. Most services are taxed at 18%. A short list sits at 5%, nearly always on the condition that the supplier gives up input tax credit. A handful are exempt, and a separate group is taxed under reverse charge, where the customer pays the tax instead of the supplier. This page lists the GST rate for the services businesses buy and sell most often, explains the exceptions that matter, and links to the detailed guide for each SAC code.

GST for services: 18% is the default

Every service under GST is identified by a six-digit SAC code beginning with 99, and the rate notification attaches a rate to each code or group of codes. The rate reform that took effect on 22 September 2025 reduced most goods and services to two main slabs, 5% and 18%, plus a 0% exempt band and a 40% rate for a short list of luxury and sin goods. Our guide to the GST rate slabs in 2026 covers the reform itself.

For services the practical effect is that 18% is the answer unless a specific entry says otherwise. Consultancy, IT, accounting, advertising, commercial rent, telecom, commission, repairs and most business services all land there. The lower rate is the exception, and it is usually a trade: the supplier pays less tax on its sales but cannot claim back the GST it paid on its own purchases. That is why a 5% service is not always cheaper for a business buyer, who could have claimed credit on an 18% invoice anyway.

If you need the code before the rate, start with the SAC code list for services, which explains the 99xxxx structure and the main headings.

GST rate list for common services

The table below covers the services most often invoiced. Several entries carry conditions, and those are noted in the table. The authoritative source is always the current rate notification on cbic-gst.gov.in.

Each row has its own guide where the detail matters: SAC for consultancy, SAC for software and IT, SAC for manpower supply, SAC for rent and leasing, SAC for hotel accommodation, SAC for education and training and the code for digital marketing. Restaurant rates are covered in restaurant GST rates explained.

GST on catering services follows the same logic as restaurant service. Outdoor catering has generally been taxed at the lower rate without input tax credit, with the higher rate and credit applying where it is linked to specified premises such as a hotel above the tariff threshold. Catering supplied to a school up to higher secondary level is exempt. Because these entries carry conditions, check the current notification before quoting a rate in a catering contract.

GST on transport services

The GST rate on transport services depends first on whether goods or passengers are moving, and then on who is carrying them.

Goods by road. A goods transport agency is a transporter that issues a consignment note. It has two rate options: 5% without taking input tax credit on its own inputs, or a higher rate with full credit. That higher option was 12% when the option was introduced, and our SAC list records it at 18% after the 2025 rationalisation; confirm the current figure in the notification before you build it into a rate master. On the 5% option, the tax is usually paid by the business recipient under reverse charge unless the GTA has opted for forward charge for the year. The full mechanics, including the annual declaration and the recipients who must pay, are in GST on GTA and reverse charge.

A transporter that does not issue a consignment note, such as a truck owner hiring out a vehicle, is not a GTA, and a courier is a different service again. Transport of agricultural produce, milk, salt, food grain and relief material is exempt, as are very small consignments below thresholds set in the notification. Freight billed on the same invoice as the goods is usually part of a composite supply and takes the rate of the goods. See the code for transport and freight.

Passengers. Most road passenger transport, such as air-conditioned buses and cab services, is at the 5% rate without credit, while non-air-conditioned public transport is exempt. Economy-class air travel is at the lower rate and premium classes at a higher one. Cab and bus bookings through an app are often taxed in the hands of the platform under Section 9(5). The precise entries vary by mode, so take the rate from the notification for the specific service.

GST on education

GST on education turns on who is teaching, not on what is taught. Services by an educational institution to its students, faculty and staff are exempt where the institution provides education as part of a curriculum leading to a qualification recognised by law. A school up to higher secondary also gets exemptions on services it buys, such as transport, catering, security and cleaning.

Everything else in the education space is generally taxable at 18%: private coaching and tuition centres, test preparation, corporate training, and online courses that do not lead to a recognised qualification. The same Class 12 syllabus can be exempt in a school and taxable at a coaching centre. Detail is in the SAC code for education and training.

GST on construction and labour charges

GST on construction services is the area with the most conditional entries. A works contract, meaning work on immovable property that also involves transfer of goods, is treated entirely as a service under heading 9954, with no split between material and labour. Commercial and industrial works contracts are generally taxed at 18%. Residential real estate projects run a separate regime of lower rates without input tax credit, and there have been specific entries for government and affordable-housing work that changed over time. Read the entry for your exact code and circumstance rather than a summary; our guides to the code for works contracts and GST on under-construction property set out how these work.

For the buyer, the rate is often the second question. Section 17(5) blocks input tax credit on works contracts for construction of immovable property unless the buyer is itself supplying an onward works contract, so the end owner generally bears the tax as a cost.

GST on labour charges depends on what the labour is. Manpower supplied to work under your direction is taxed at 18% under 998519, normally on the full invoice including wages and statutory contributions. Labour-only construction is classified under 9954. Processing someone else's goods is job work under 9988. A narrow exemption covers certain pure labour contracts, but it is conditional. See the code for labour charges.

GST on commission and brokerage

An agent who earns commission is supplying a service to the principal, and GST on commission is charged at 18% on the commission amount, not on the value of the goods, property or policy sold. A property broker earning 2% on a ₹50 lakh sale charges GST on the ₹1 lakh brokerage, so the tax is ₹18,000. A selling agent on a marketplace, a travel agent's commission and a stockbroker's brokerage follow the same principle, each under its own SAC.

Two points change the answer. First, some agent categories are on the reverse charge list, so the principal pays: insurance agents' commission is paid by the insurer, and recovery agents working for banks and NBFCs are handled the same way. Second, an agent who arranges a supply between a foreign principal and an Indian customer may be an intermediary, in which case the place of supply is in India and the commission is not an export. See place of supply rules.

Services where the buyer pays the GST

For a business, the most common services under reverse charge are:

• Legal services from an advocate or firm of advocates to a business entity, at 18%. See GST on legal services.
• Goods transport agency freight, unless the GTA has opted for forward charge.
• Director services to a company, at 18%. See GST on director remuneration.
• Rent: residential property let to a registered tenant, and commercial property let by an unregistered landlord to a registered tenant. See GST on rent.
• Security services from a supplier other than a body corporate to a registered person.

Reverse charge tax is paid in cash through the electronic cash ledger and is then normally claimable as input tax credit. The general mechanism is in the reverse charge mechanism under GST.

Whether reverse charge applies often depends on the supplier's registration. A landlord who has quietly let a registration lapse, or a transporter whose GSTIN was cancelled but still charges tax, leaves the liability with you. Checking a vendor's GSTIN status before paying takes seconds with GSTIN verification, and the same check shows whether the supplier is filing the returns your credit depends on.

When a service provider must register

A person supplying services must register once aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. The ₹40 lakh limit applies only to businesses that supply goods exclusively; add a single taxable service and the threshold drops to ₹20 lakh. Turnover is measured PAN-wide across India and includes exempt supplies and exports.

Section 24 overrides the threshold for some categories, such as casual and non-resident taxable persons and persons liable to pay tax under reverse charge. An advocate supplying only reverse charge services is not required to register at all. The full rules are in the GST registration turnover limit, and freelancers billing foreign clients should read GST for freelancers and service exports.

GST vs "service charge" on a bill

People searching for GST on service charge are usually looking at a restaurant bill, and the two lines are different things. GST is a tax paid to the government. A service charge is an amount the restaurant keeps. The Central Consumer Protection Authority has said a restaurant cannot make service charge mandatory or add it to the bill automatically, and a customer can ask for it to be removed. Where the customer does accept it, it forms part of the value of the supply and GST is charged on it as well. A seller's GSTIN printed on a bill can be checked to confirm the tax is genuine; see is the GST on my bill real.

Frequently asked questions