SAC Code and GST Rate for Recruitment and HR Services

The GST Council in India determines the GST rate for all services. The Council fixed the GST rate for services in five slabs, namely 0%, 5%, 12%, 18% and 28%. Majority of the services in India attract 18% GST. Further, GST rates are linked to SAC Code or Services Accounting Code, a services classification system created by the service tax department for levy of service tax. In this article, we look at the SAC code and GST rate for recruitment services and HR services in India.

GST Registration for Recruitment Service Providers

GST registration would be mandatory for most recruitment service providers as they may become a taxable person under GST through the following criteria's apart from the aggregate annual sales turnover criteria.

Inter-State Supply

If a business engages in inter-state, then GST registration would be required irrespective of annual aggregate turnover.

Casual Taxable Person

Casual taxable person means a person who occasionally undertakes transactions involving the supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business. Most freelance professionals can be classified as casual taxable person. Hence, GST registration would be mandatory for such persons.

Non-Resident Taxable Persons

Non-resident taxable person means any person who occasionally undertakes transactions involving the supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India. This clause would again require many freelance recruitment service providers to be in conformance with the GST portal. Click here to read on GST Registration For Foreign Companies

GST Rate for Recruitment Services or HR Services

Employment services, including personnel search/referral service & labour supply service, are classified under a heading Group 99851 of the SAC code. The following list describes the SAC codes under group 99851: SAC Code 998511 - Executive/retained personnel search services. SAC Code 998512 - Permanent placement services, other than executive search services. SAC Code 998513 - Contract staffing services. SAC Code 998514 - Temporary staffing services. SAC Code 998515 - Long-term staffing (payrolling) services. SAC Code 998516 - Temporary staffing-to-permanent placement services. SAC Code 998517 - Co-employment staffing services. SAC Code 998519 - Other employment & labour supply services. GST rate of 18% is applicable to all recruitment services and HR services. The above services are not mentioned under the list of services that are exempt from GST. The rates for the above services have also not been explicitly mentioned by the GST Council. Hence, the default GST rate for services of 18% would be applicable for the above services.

Click here to find GST rate for all services.

GST Registration

GST LUT Form