Website and software development in India attracts GST at 18%. The service code (SAC) is 998314, “IT design and development services”, so a website quoted at ₹24,999 plus GST comes to ₹29,498.82 on the invoice. If your business is GST-registered and the website is for business use, you can usually claim that 18% back as input tax credit; if you are not registered, it is a real cost. Work for clients outside India is normally zero-rated under a Letter of Undertaking (LUT).
This is practical information, not tax advice. Figures and rules are as of 2026; confirm anything that affects your own return with your CA.
The rate and the SAC codes
IT services sit under SAC heading 9983. The 2025 GST rate overhaul cut rates on many goods but left IT services at 18%. Common website charges are usually billed like this:
| What you are paying for | SAC you will usually see | GST (as of 2026) |
|---|---|---|
| Website design and development | 998314 | 18% |
| Web app, SaaS or custom software development | 998314 | 18% |
| Website and application hosting | 998315 | 18% |
| Maintenance, support or care plan | Often 998313 or 998314 | 18% |
| Domain registration | Varies by registrar | 18% |
| Development for a client abroad, under LUT | 998314 | 0% (zero-rated) |
Smaller suppliers may print only the first four digits, 9983; that is allowed. The rate is the same whether you are buying a five-page brochure site or a custom software build.
CGST and SGST, or IGST?
The split depends on the place of supply. For a GST-registered buyer, that is the state in your GSTIN (for an unregistered buyer, the address on the invoice), not where the developer works from.
- Same state: 9% CGST + 9% SGST.
- Different state: 18% IGST.
A quick check: the first two digits of a GSTIN are the state code. If yours match the supplier’s, expect CGST + SGST; if not, IGST. A wrong tax type can hold up your credit, so get it corrected before you pay.
Worked example: GST on a ₹24,999 website
Our pricing at Codelith Lab is quoted this way: a Business Website is ₹24,999 + 18% GST, with a GST invoice on every milestone. The same arithmetic applies to any supplier who quotes “plus GST”.
| Line | Buyer in the same state | Buyer in another state |
|---|---|---|
| Price before GST | ₹24,999.00 | ₹24,999.00 |
| CGST at 9% | ₹2,249.91 | – |
| SGST at 9% | ₹2,249.91 | – |
| IGST at 18% | – | ₹4,499.82 |
| Invoice total | ₹29,498.82 | ₹29,498.82 |
| Net cost if you are GST-registered (after credit) | ₹24,999.00 | ₹24,999.00 |
| Net cost if you are not registered | ₹29,498.82 | ₹29,498.82 |
Three things the table does not show:
- “Plus GST” and “inclusive” are different prices. ₹24,999 inclusive of GST means ₹21,185.59 plus ₹3,813.41 tax. Always ask which one a quote means; here the gap is ₹4,499.82.
- Credit is not cash back. A registered buyer pays the full ₹29,498.82, then sets the ₹4,499.82 off against the GST owed on their own sales. If your output GST is small, the credit can sit in your ledger for months.
- Milestones carry their own tax. On a 50:50 split, each invoice is ₹12,499.50 plus ₹2,249.91 GST. For an advance paid before any invoice, you get a receipt voucher; the credit comes from the tax invoice that follows.
For a bigger scope, the website cost calculator gives a range; the same GST logic applies.
What a correct GST invoice looks like
Rule 46 of the CGST Rules lists what a tax invoice must carry. Check these before you pay:
- The supplier’s legal name, address and GSTIN. Verify it on the GST portal’s “Search Taxpayer” page; the legal name should match.
- A unique invoice number (up to 16 characters, in one series per financial year) and the date.
- Your name, address and GSTIN, if you are registered. A wrong GSTIN puts the invoice in someone else’s GSTR-2B, not yours.
- SAC 998314 (or 9983) and a real description: “Business website, 7 pages, milestone 2 of 2” is better than “IT services”.
- Taxable value, GST rate and tax amount, with CGST and SGST, or IGST, shown separately.
- Place of supply with the state name.
- Whether tax is payable on reverse charge (normally “No”).
- Signature or digital signature of the supplier.
- If the supplier’s turnover is above the e-invoicing limit (₹5 crore as of 2026), an IRN and QR code on B2B invoices.
The biggest red flag is GST added to a bill with no GSTIN. An unregistered supplier cannot collect GST, so do not pay that part. Service providers under ₹20 lakh turnover a year (₹10 lakh in some special-category states) need not register, and some small suppliers use a composition-type scheme with a bill of supply and no GST shown. Neither is a problem; charging GST without a registration is.
Input tax credit: when the 18% comes back
A GST-registered business can usually claim the GST on its website as input tax credit, since a website is used for business and is not on the blocked-credit list. The conditions:
- You hold a valid tax invoice with your correct GSTIN.
- The invoice appears in your GSTR-2B (the supplier has reported it).
- The service, or that milestone, has been delivered.
- The supplier has paid the tax and filed their returns.
- You claim it in time: as of 2026, by 30 November after the end of the financial year, or when you file the annual return if that is earlier.
If you claim it, book the website at the pre-GST value. The credit usually does not work if your business supplies only exempt services (most healthcare and many education services, for example); then the 18% is a plain cost. And registering for GST just to recover 18% on one website is rarely worth it, because registration brings regular returns for as long as you hold it.
Selling web development abroad: zero-rated under LUT
If you build websites for clients outside India, the work is usually an export of services, which GST treats as zero-rated. It qualifies when you are in India, the client is outside India, the place of supply is outside India, you are paid in convertible foreign exchange (or in rupees where RBI permits), and the two of you are not branches of the same entity.
- Under LUT (most common): file a Letter of Undertaking on the GST portal (form RFD-11) once per financial year, ideally before the first export invoice. Invoice without IGST, with a line stating the supply is meant for export under LUT without payment of integrated tax.
- With IGST paid: charge 18% IGST and claim a refund later. This locks up cash.
Zero-rated is not exempt: you keep the credit on your own costs (laptops, software, hosting) and can claim a refund of unused credit. Keep the bank’s inward remittance certificate for every payment. If payment does not arrive within the allowed period (one year from the invoice under the rules as of 2026), IGST becomes payable with interest. One trap: if you only arrange the work and someone else builds it, the “intermediary” rules can pull the supply back into Indian GST. The reverse case matters too: a GST-registered business hiring a developer based abroad usually pays 18% IGST itself under reverse charge, then claims it as credit. Confirm your set-up with a CA.
GST on domain, hosting and tools
Domains, hosting, business email and SSL certificates bought from Indian companies carry 18% GST. Foreign providers generally charge Indian customers 18% too. If you are registered, enter your GSTIN at checkout so you get an invoice you can claim; where a foreign provider does not charge GST on a business purchase, you may owe it yourself under reverse charge.
Whose name is on the account matters more than the rate. When an agency buys your domain and re-bills it, the registrar’s invoice is in the agency’s name and you depend on them at every renewal. At Codelith Lab we create the domain, hosting and every login in the client’s name, so the registrar’s GST invoice, and the credit, come straight to you. See typical web hosting costs.
TDS on web development: the cautious version
TDS is income tax, not GST, but it shows up on the same payment. If your business must deduct TDS (companies and firms do; individuals and HUFs below the tax-audit turnover limit usually do not), web development payments have typically fallen under section 194J of the Income-tax Act, 1961.
- The rate depends on classification. Many CAs treat a website build as fees for technical services (2%); some treat it as professional services (10%), and some treat a fixed-scope build as a contract under section 194C. Ask your CA to pick one and apply it consistently.
- Threshold. 194J applies once payments to one supplier cross ₹50,000 in a financial year (raised from ₹30,000 in April 2025). A single ₹24,999 site is usually below it.
- Base. Where GST is shown separately, CBDT clarified in 2017 that TDS is worked out on the amount before GST. At 2%, that is ₹499.98 on ₹24,999, not ₹589.98 on the full invoice.
- Paperwork. Deposit the tax and file the TDS return on time, or the supplier cannot take credit.
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered the TDS provisions, so your CA may cite a new section number. The broad logic is meant to carry over; confirm current rates and thresholds before you deduct.
When GST should change your decision
- You are GST-registered: the 18% comes back as credit, so compare suppliers on the pre-GST price and on how cleanly their invoices reach your GSTR-2B.
- You are not registered: GST is a real 18% on top. A genuine unregistered freelancer, who cannot charge GST, can be the cheaper and sensible choice for a small site, provided you get a written scope, a proper bill and every login in your name.
- A “no bill” discount: skip it. You lose the paper trail that proves you paid for and own the work, and a registered supplier offering it is avoiding tax they owe.
For pre-tax build prices, see website development cost in India.
The short version
- Website and software development carry 18% GST under SAC 998314: CGST + SGST within a state, IGST across states.
- Registered businesses usually recover the 18% as input tax credit; unregistered buyers pay it as a cost, so “plus GST” versus “inclusive” matters.
- Work for foreign clients is zero-rated under an LUT filed each financial year, with payment in foreign exchange.
- TDS is separate, usually on the pre-GST amount; take the rate and section from your CA.
Frequently Asked Questions
What is the GST rate on website development in India?
As of 2026, website design and development is taxed at 18% GST. If you and the developer are in the same state, the invoice shows 9% CGST and 9% SGST; if you are in different states, it shows 18% IGST. The rate is the same for a simple business website, an online store or a custom web application. Hosting, domains and maintenance plans are also usually billed at 18%. Confirm the current position with your CA for large invoices.
What is the SAC code for website development?
The SAC code normally used for website and software development is 998314, which covers IT design and development services. Hosting is usually billed under 998315, and support or maintenance often under 998313. Smaller suppliers may show only the first four digits, 9983, which is allowed below a turnover limit. The code matters less than the rate and your GSTIN being correct, but it should appear on every tax invoice you receive.
Can I claim input tax credit on the GST paid for my website?
Usually yes, if your business is GST-registered and the website is used for business. You need a valid tax invoice showing your correct GSTIN, the invoice must appear in your GSTR-2B, and you must claim it within the time limit, which as of 2026 is 30 November after the financial year ends. If your business supplies only exempt services, such as most healthcare, the credit is generally not available. Ask your CA to confirm your case.
Should a freelance web developer charge me GST?
Only if they are GST-registered. Service providers with aggregate turnover under ₹20 lakh a year (₹10 lakh in some special-category states) usually do not need to register, and an unregistered person cannot collect GST. If an invoice adds 18% but shows no GSTIN, do not pay the tax part. Check any GSTIN on the GST portal’s Search Taxpayer page before paying, and make sure the legal name matches the invoice.
Is GST charged on website development for clients outside India?
Usually not. Building a website for a client located outside India, paid in convertible foreign exchange, is normally an export of services and zero-rated under GST. Most developers file a Letter of Undertaking on the GST portal each financial year and invoice without IGST, while still claiming credit on their own costs. If you only arrange the work and someone else builds it, the intermediary rules may apply instead, so confirm your set-up with a CA.
