Professional services

GST invoice format for a recruitment or placement agency

A placement agency's invoice is raised when a candidate joins, so it should name the candidate, position, joining date and the annual CTC on which the fee percentage is calculated. Permanent placement is SAC 998512 and executive search 998511, both at 18%. State the replacement guarantee period, because if the candidate leaves early the agency either replaces them or issues a credit note. Overseas recruiters billing a foreign employer for Indian candidates should check export conditions before omitting IGST.

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Sample recruitment agency invoice

Description	HSN/SAC	Qty	Rate (₹)	Taxable (₹)	GST
Permanent placement fee: Senior Accountant, CTC ₹9,00,000 at 8.33%	998512	1 OTH	75,000.00	75,000.00	18%
Permanent placement fee: Sales Executive, CTC ₹4,80,000 at 8.33%	998512	2 OTH	40,000.00	80,000.00	18%
Executive search retainer, first instalment: Plant Head	998511	1 OTH	2,00,000.00	2,00,000.00	18%
Campus hiring drive coordination, one college	998519	1 OTH	30,000.00	30,000.00	18%
Taxable value				₹3,85,000.00
GST (CGST + SGST, or IGST if inter-state)				₹69,300.00
Invoice total				₹4,54,300.00

Sample prices are illustrative. Check the GST rate for your exact item or service before billing.

Extra fields a recruitment agency invoice needs

Candidate name and position: Clients pay per hire. The candidate and role on each line match the invoice to the offer letter and the hiring manager's approval.
Joining date: The fee usually becomes payable on joining. The date establishes when the supply was completed and when GST became due.
CTC and fee percentage: Fees are typically a percentage of first-year fixed CTC. Showing both lets the HR team confirm the calculation without opening the agreement.
Replacement guarantee period: A free replacement or refund if the candidate leaves within, for example, 90 days is standard. Printing the period sets expectations and supports later credit notes.
Requisition or job code: Large employers track openings with requisition IDs. Quoting it lets the client close the opening in its system and approve payment.
Retainer or milestone stage: Executive search is often billed in thirds: on engagement, on shortlist and on joining. Naming the stage avoids confusion about what is being paid for.

Standard GST invoice fields

Rule 46 of the CGST Rules applies to every tax invoice, including this one:

Supplier name, address and GSTIN
Consecutive invoice number (max 16 characters, unique for the year)
Date of issue
Customer name, address and GSTIN (if registered)
Place of supply with state name
HSN/SAC code per item
Description, quantity and unit
Taxable value after discounts
GST rate and CGST + SGST or IGST amounts
Signature or digital signature

GST rules that matter for a recruitment agency

Codes for recruitment work

The official SAC list places executive or retained personnel search at 998511, permanent placement other than executive search at 998512, and other employment and labour supply services at 998519. Monthly contract staffing is a different supply under 998513. All are under heading 9985 and taxed at 18%. A firm that both places permanent hires and deploys contract staff should keep them on separate invoices so the client's HR and procurement teams can track hiring cost and staffing cost apart.

Time of supply on joining

Placement fees are earned when the candidate joins. The invoice should be raised within 30 days of the service being completed, which in practice is the joining date. Agencies that wait for the replacement guarantee to expire before invoicing delay tax beyond the legal time limit. Invoice on joining, then use a credit note if the candidate leaves within the guarantee and a refund is due.

Credit notes for early exits

If a candidate resigns within the guarantee period and the agency refunds part of the fee, issue a credit note referring to the original invoice, reduce output tax in the return, and make sure the client reverses the matching input credit. The credit note must be issued by 30 November following the end of the financial year, or the return for that period, whichever is earlier. Replacements given free do not need a new invoice.

Recruiting for foreign employers

An Indian agency sourcing candidates for a Gulf or European employer may be exporting services if the employer is located abroad and pays in foreign exchange. Charging fees to candidates rather than employers is a different supply, taxable in India, and is also restricted by emigration rules for overseas recruitment, which require registration as a recruiting agent.

Job portals and advertisements

Agencies often buy job portal subscriptions and job ads. These carry 18% GST from the portal and can be claimed as input credit. Recharging them to the client as part of the fee keeps the whole amount at 18% under your own SAC.

Campus and bulk hiring drives

Agencies that run campus drives or bulk hiring for call centres and retail chains often charge a flat fee per drive or per batch rather than a percentage of CTC. These belong under 998519, other employment and labour supply services, at 18%, and the invoice should describe the drive, the institution or location, the dates and the number of candidates assessed and selected. When a drive fee is followed by per-hire fees for the candidates who join, keep the two as separate lines, because the drive fee is earned on completion of the drive whether or not anyone joins, while per-hire fees follow the joining dates.

Common billing mistakes

Holding the invoice until the 90-day guarantee ends, which delays GST beyond the time the law allows.
Reducing next month's invoice instead of issuing a credit note when a candidate leaves early.
Calculating the fee on gross CTC including variable pay when the agreement says fixed CTC, leading to short payment and disputes.
Billing contract staffing and permanent placement on the same line under one code.

Recruitment Agency GST invoice: FAQ

What is the GST rate on recruitment services?

Placement and executive search services under SAC 998511 and 998512 are taxed at 18%.

When should a placement invoice be raised?

On or soon after the candidate's joining date, within 30 days of the service being completed.

How is GST handled if the candidate leaves early?

Issue a credit note for any refunded fee and reduce your output tax. A free replacement needs no new GST document.

Is GST charged on recruitment for a foreign company?

If the employer is outside India, pays in foreign exchange and other export conditions are met, the invoice can be zero-rated under LUT.

Can a recruitment agency charge candidates?

Charging candidates is restricted by labour and emigration rules in many cases. Where permitted, those fees are also taxable 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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