GST on Website Development and Hosting
Website development, app development and web hosting are IT services taxed at 18% GST in India: 9% CGST plus 9% SGST when supplier and customer are in the same state, or 18% IGST across states. Development usually falls under SAC 998314 and hosting under 998315. A GST-registered business can generally claim the tax as input tax credit. This is general information, not tax advice.
If you are paying someone to build or host your website in India, the invoice will usually carry GST. How much, which type, and whether you can get it back depends on a few rules that are simpler than they look.
This guide explains the rate, the service codes, the CGST, SGST and IGST split, and input tax credit, with links to the official texts. It is general information, not tax advice. GST law changes through notifications, so check the current position with your chartered accountant before you rely on it for a filing.
The GST rate on website and IT services
Website design, app development and hosting fall under heading 9983, “other professional, technical and business services”, in the services rate notification. The central tax rate for item (ii) of that heading is 9%, as shown in the consolidated Notification No. 11/2017-Central Tax (Rate) published by the GST Council. State tax is levied at a matching rate, so the total is 18%.
The entry was reworded, with effect from 22 September 2025, by Notification No. 15/2025-Central Tax (Rate) (Gazette copy). That amendment substituted the description of item (ii) and did not change its rate column. Rates can be amended again, so confirm the current notification before you invoice or file.
| Invoice amount | GST at 18% | Total payable |
|---|---|---|
| ₹25,000 website build | ₹4,500 | ₹29,500 |
| ₹1,00,000 web app | ₹18,000 | ₹1,18,000 |
| ₹2,999 yearly hosting | ₹539.82 | ₹3,538.82 |
Which SAC code applies
Services are classified with six-digit Services Accounting Codes (SAC). The GST Council’s Explanatory Notes to the Scheme of Classification of Services describe what each code covers.
SAC 998314: IT design and development services
This code covers designing and writing the code for software, explicitly including “designing the structure and content of a web page” and writing the code to create and implement it. Custom applications, databases, and adapting or installing an existing application for a client also sit here. Most website and app builds fall under 998314.
SAC 998315: hosting and IT infrastructure provisioning
This code covers providing the infrastructure to host a customer’s website and related files, as with our web hosting plans, on shared or dedicated servers, and bundled packages of hosting and management of a website and its applications.
When a contract bundles both
The notes say that a contract where web page design and development is bundled with hosting of the page falls under 998315, not 998314. If your developer sells you a single package that includes both, that is the code they may use. Separate invoices for the build and for hosting would each carry their own code.
Related codes include 998313 for IT consulting and support and 998316 for IT infrastructure and network management.
CGST and SGST, or IGST?
GST on a service is either intra-state (CGST plus SGST) or inter-state (IGST). Which one applies depends on where the supplier is located and the place of supply.
- Under section 8 of the IGST Act, a supply of services is intra-state when the supplier’s location and the place of supply are in the same state.
- Under section 7 of the IGST Act, it is inter-state when they are in different states.
For most website and hosting services between parties in India, the general rule in section 12(2) of the IGST Act applies:
- for a registered customer, the place of supply is the customer’s location;
- for an unregistered customer, it is the customer’s address on record, or the supplier’s location if there is none.
Worked examples
Hostlyx bills Indian customers through Zorixo Creations Private Limited, registered in Karnataka (GSTIN 29AACCZ4459K1ZN).
| Customer | Place of supply | Tax on the invoice |
|---|---|---|
| Registered business in Bengaluru | Karnataka | 9% CGST + 9% SGST |
| Registered business in Chennai | Tamil Nadu | 18% IGST |
| Unregistered individual in Mysuru, address on record | Karnataka | 9% CGST + 9% SGST |
| Unregistered individual in Pune, address on record | Maharashtra | 18% IGST |
The total is 18% in each case. Only the split changes, which matters for how you claim credit. Customers outside India fall under different place-of-supply rules; ask your accountant if that applies to you.
Claiming input tax credit
If your business is registered for GST and the website, app or hosting is used for the business, you can generally claim the GST you paid as input tax credit (ITC) and set it against the GST you owe on your own sales.
The CBIC’s flier on the input tax credit mechanism sets out the basic conditions, which in summary are:
- you hold a valid tax invoice from the supplier;
- you have received the service;
- the tax has actually been paid to the government by the supplier;
- you have filed your return.
The same flier notes that if you do not pay the supplier, including the tax, within 180 days of the invoice date, the credit you took is added back to your tax liability with interest. Time limits for claiming credit have been amended since that flier was published, so check the current deadline with your accountant.
Practical steps
- Give the supplier your GSTIN and registered business name before the invoice is raised.
- Check that the invoice shows your GSTIN, the supplier’s GSTIN, the SAC, the place of supply and the tax split.
- Check that the invoice appears in your credit records on the GST portal before you claim it.
- Pay the supplier within the time limit.
You can check any supplier’s registration with the GST portal’s taxpayer search.
What a correct GST invoice should show
| Field | Why it matters |
|---|---|
| Supplier name, address and GSTIN | Proves the supplier is registered |
| Your name, address and GSTIN | Needed for your credit claim |
| Invoice number and date | Sets the timing for your claim |
| Description and SAC | Shows what was supplied |
| Taxable value | The price before tax |
| CGST and SGST, or IGST, with rates | Shows the place of supply was applied |
| Place of supply | The state used to decide the tax type |
Questions to ask your developer or host
- Are you registered for GST, and what is your GSTIN?
- Is your quote inclusive or exclusive of GST?
- Which SAC will you use for the build and for hosting?
- Will build and hosting be on separate invoices?
- Will the invoice carry my GSTIN so I can claim input tax credit?
Clear invoices from Hostlyx
Hostlyx’s Indian customers are invoiced by Zorixo Creations Private Limited with a GST invoice for every payment, and can pay through Razorpay. Our hosting prices are shown before GST, so you can see the tax separately. If you would like a fixed written quote for a website, app or hosting with the GST shown line by line, get in touch.