GST on Consultancy Services in India
From legal advice to software support, consultancy services are a major part of India’s service sector. Under the Goods and Services Tax regime, most consultancy services are taxable. In this guide, we break down the gst on consultancy services, including rates and classifications by profession.
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What Are Consultancy Services Under GST?
Consultancy services include any professional advice, guidance, or expertise offered in exchange for a fee. These services are considered taxable under GST and fall under SAC Code 9983 or specific subcategories based on the industry.
GST Rate on Consultancy Services
The standard consultancy services gst rate is:
- 18% GST
This rate applies to almost all types of consultancy, regardless of whether it’s a one-time consultation or a long-term professional service.
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GST on Different Types of Consultancy Services
| Service Type | GST Rate | Applicable SAC |
|---|---|---|
| Legal consultancy | 18% | 998213 |
| Medical consultancy (non-doctors) | 18% | 998399 |
| Software consultancy services | 18% | 998313 |
| Management consultancy services | 18% | 998311 |
| Engineering consultancy services | 18% | 998346 |
| Architectural consultancy services | 18% | 998321 |
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Input Tax Credit (ITC) for Consultancy Services
- Claim ITC on office rent, equipment, internet bills, and software tools
- Issue GST invoices with correct SAC codes
- File monthly or quarterly returns based on turnover
However, ITC is not allowed for personal use expenses. Learn more about claim Input Tax Credit.
Export of Consultancy Services
- Consultancy services exported are zero-rated under GST
- No GST is charged on the invoice
- You can claim a refund of Input Tax Credit
To qualify, payment must be received in foreign currency and the recipient must be located outside India.
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Conclusion
Understanding the correct gst on consultancy services helps professionals, agencies, and clients manage taxation correctly and stay compliant with billing and filing requirements. For more info, refer to our guide on GST returns.
Jagdish Prasad is a Chartered Accountant with over 5 years of experience. He helps people and businesses with GST, income tax, and HSN codes. Jagdish makes sure his clients follow all tax rules and save money the right way. He also enjoys writing simple articles to help others understand taxes and stay updated with the latest rules.
Frequently Asked Questions (FAQs)
- What is the GST rate on consultancy services in India?The GST on consultancy services in India is 18% for most professional services.
- Are all types of consultancy services taxable?Yes, except medical consultancy by individual doctors and a few government-notified exemptions.
- What is the GST rate on software consultancy services?It is 18%, under SAC Code 998313.
- Can freelancers offering consultancy charge GST?Yes, if their annual turnover exceeds ₹20 lakhs (₹10 lakhs in special category states), they must register for GST and charge 18%.
- Are consultancy services to foreign clients taxed?No. Such services are zero-rated exports under GST and qualify for refund of input tax.
