New GST Rate for IT Services in India: Software Development, Support & More
- The gst on it services in india is generally 18% for services such as software development, IT consulting, cloud hosting, SaaS, and technical support services.
- Export of eligible IT services is treated as a zero-rated supply under GST. Businesses can supply services under LUT without payment of IGST or claim refund of IGST paid, subject to applicable conditions.
- The software gst rate is generally 18% for software development, licensing, subscription-based software, and SaaS services, depending on the nature of supply and applicable classification.
- IT companies can claim eligible Input Tax Credit on business expenses such as office rent, software tools, and marketing expenses, subject to GST conditions and valid invoices.
- IT freelancers and service providers must comply with GST registration and tax requirements if they cross the applicable turnover threshold or fall under mandatory registration provisions.
The Information Technology (IT) sector is the backbone of modern India, covering everything from software development to cloud hosting and tech support. But how does GST (Goods and Services Tax) apply to these services? In this blog, we’ll explain the GST rate for IT services in India, what qualifies as an IT service, and how businesses in this space can manage their tax obligations.
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New GST Rate on IT Services in India
The applicable GST rates for key IT service categories after 22 Sep 2025 are compared below. No major GST rate change has been introduced for these IT services.
| IT Service | SAC Code | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) | Remarks |
|---|---|---|---|---|
| IT consulting & support | 998313 | 18% | 18% | Helpdesk, troubleshooting, installation & configuration |
| IT design & development (custom software, integrations) | 998314 | 18% | 18% | Custom builds, implementation, enhancements |
| Hosting / IT infrastructure & network management (including cloud/managed services) | 998315 | 18% | 18% | Data centre, hosting, infrastructure provisioning & NOC |
| IT education & training (corporate / non-certifying) | 998316 | 18% | 18% | Commercial trainings; recognised degree/board programs follow education exemptions |
| Other IT services (data storage/processing, misc.) | 998319 | 18% | 18% | Use when not specifically covered above |
IT Service
SAC Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Remarks
IT Service
SAC Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Remarks
IT Service
SAC Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Remarks
IT Service
SAC Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Remarks
IT Service
SAC Code
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Remarks
Note: Under the prevailing two-tier approach for many goods/services, IT services historically taxed at 18% are expected to remain at 18%. Exports of services and supplies to SEZs are zero-rated (LUT/bond or IGST with refund). Cross-border electronically supplied services (OIDAR) to customers in India are taxable in India and may require simplified GST registration for foreign providers. Final applicability is subject to CBIC/GST Council notification.
SAC Classification and GST on Software & IT Supplies
| Type of Software Supply | HSN/SAC | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) | How It’s Treated |
|---|---|---|---|---|
| Software supplied on physical media | Applicable HSN based on product classification | 18% (where applicable) | 18% (where applicable) | Treated based on the nature of supply |
| Electronically supplied software / SaaS subscriptions | Applicable SAC based on service classification | 18% | 18% | Service (subscription, hosting, provisioning) |
| Software maintenance & support (AMC) | SAC 998313 | 18% | 18% | Service (consulting/support) |
Type of Software Supply
HSN/SAC
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
How It’s Treated
Type of Software Supply
HSN/SAC
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
How It’s Treated
Type of Software Supply
HSN/SAC
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
How It’s Treated
Note: No major GST rate change has been introduced for these IT services after 22 Sep 2025. The applicable GST rate continues to depend on the nature of supply and classification.
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Are IT Services Taxable Under GST?
The gst on software services is generally 18% for software development, SaaS subscriptions, and other taxable software-related services.
IT services are classified under relevant SAC codes within the 9983 category, depending on the nature of service.
- Software development and customisation services (SAC 998314)
- IT consulting and technical support services (SAC 998313)
- Cloud hosting and IT infrastructure services (SAC 998315)
- Data processing and related IT services (SAC 998319)
- System integration and maintenance services
Export of IT Services – Is GST Applicable?
No! Export of services (to clients outside India) is zero-rated under GST.
- Exporters must register under GST
- File LUT (Letter of Undertaking) to export services without paying GST
- Or pay GST and later claim refund
This benefits freelancers, SaaS businesses, and IT firms serving overseas clients.
Input Tax Credit (ITC) for IT Companies
Yes, businesses offering IT services can claim Input Tax Credit on:
- Office rent and utilities
- Software tools and licenses
- Internet and hosting services
- Marketing/advertising spend
- Subcontractor invoices
Proper billing and GST-compliant invoices are required to utilize this benefit.
