Professional services
A hosting provider's invoice should show the resources billed and the period: servers or virtual machines by size and hours, storage in GB, bandwidth, backups and support plans. Hosting and IT infrastructure provisioning is SAC 998315 at 18%, and managed infrastructure services are 998316. Usage-based billing needs the metering period and unit rates on each line. Indian business customers should be billed to their GSTIN for credit, while customers abroad can be treated as exports when the conditions are met.
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Or create these invoices in software, free| Description | HSN/SAC | Qty | Rate (₹) | Taxable (₹) | GST |
|---|---|---|---|---|---|
| Virtual server, 4 vCPU and 16 GB RAM, Mumbai region, 720 hours | 998315 | 720 NOS | 8.50 | 6,120.00 | 18% |
| Block storage, SSD, 500 GB for one month | 998315 | 500 NOS | 6.00 | 3,000.00 | 18% |
| Outbound data transfer, 2 TB | 998315 | 2000 NOS | 3.00 | 6,000.00 | 18% |
| Managed backup and monitoring, monthly | 998316 | 1 OTH | 4,500.00 | 4,500.00 | 18% |
| Committed-use discount, October 2026 | 998315 | 1 OTH | -1,500.00 | -1,500.00 | 18% |
| Taxable value | ₹18,120.00 | ||||
| GST (CGST + SGST, or IGST if inter-state) | ₹3,261.60 | ||||
| Invoice total | ₹21,381.60 | ||||
Sample prices are illustrative. Check the GST rate for your exact item or service before billing.
Rule 46 of the CGST Rules applies to every tax invoice, including this one:
Read more: SAC Codes for IT and Software Services Under GST · Export Invoice Under LUT: How to Bill Exports Without Paying IGST · Reverse Charge Mechanism Under GST: When the Buyer Pays the Tax · E-Invoice Applicability Limit: Who Crosses the ₹5 Crore Line
The official SAC list codes hosting and information technology infrastructure provisioning services at 998315 and IT infrastructure and network management at 998316. These are under heading 9983 and taxed at 18%. The September 2025 changes did not affect them. Domain registration and SSL certificates sold by a host also fall within its hosting supply at 18%.
Hosting supplied over the internet with minimal human intervention is an online information and database access or retrieval service, often called OIDAR. For Indian customers this changes little, as tax is charged at 18% as usual. For foreign providers supplying Indian consumers who are not registered, OIDAR rules require the foreign provider to register in India and pay IGST. Indian hosts selling to unregistered Indian customers simply charge GST at the customer's state of location.
An Indian host serving a customer located abroad, paid in foreign exchange, exports its service even though the servers are in India. File an LUT and invoice without IGST. Keep evidence of the customer's location, such as billing address and payment origin, since online sign-ups make location less obvious than for a consultancy client.
Many Indian providers resell capacity from global clouds. The global provider's invoice to the reseller carries GST if issued from its Indian entity, or IGST payable by the reseller under reverse charge if imported. The reseller then charges 18% on its full price to the customer. Mapping each customer line to the purchase line helps reconcile credit.
Customers often top up a prepaid balance. Tax on a prepayment for services is due when the amount is received, so issue a receipt voucher on top-up and adjust it as usage is invoiced. Promotional credits given free do not create a taxable supply until consumed against a paid balance.
Hosting companies above ₹5 crore of aggregate turnover must issue e-invoices with IRN to business customers. Automated monthly billing systems should call the Invoice Registration Portal for each B2B invoice before it is emailed.
Data centres also rent rack space, power and connectivity to customers who bring their own servers. Colocation is closer to infrastructure provisioning under 998315 than to renting of immovable property, and is taxed at 18%; the invoice should show racks or units, power commitment in kW, cross-connects and the term. Dedicated servers owned by the host and rented to one customer are also hosting services. Where hardware is sold outright to the customer, it is a supply of goods with its own HSN. Keeping these three models, colocation, dedicated rental and hardware sale, on distinct lines avoids misclassification and keeps the customer's asset register clean.
Hosting and IT infrastructure provisioning under SAC 998315 is taxed at 18%.
Not if it qualifies as an export of services under LUT, even if the servers are in India.
Show each resource with its metered quantity and unit rate for the billing period, with discounts as negative lines.
Yes, on paid top-ups when received. Free promotional credits are not taxed as they carry no consideration.
Rack space with power and connectivity is generally billed as infrastructure provisioning under SAC 998315 at 18%.
Sources: PIB — Recommendations of the 56th GST Council (Annexure III, services rate changes) · GSTN — Official HSN/SAC master list (SAC_MSTR sheet) · GST Council — Notification 11/2017-CT(Rate), services rates (consolidated)
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