Service businesses face 5 different GST rate categories — here is the complete reference to know exactly which rate applies to your specific services.
Services Exempt From GST (0% Rate)
Several service categories are fully exempt from GST: Healthcare services by clinical establishments and authorised medical practitioners, educational services provided by educational institutions up to higher secondary level, services provided by an individual member to their religious organisation (when not for profit), services provided to foreign diplomatic missions, agricultural services including irrigation and plantation, public transportation services (non-AC metered taxi, non-AC buses, local trains), services related to funeral and burial, and services provided by RBI, SEBI, IRDA when regulated.
The GST exemption for healthcare and education is particularly significant — most healthcare services and educational services to students are completely outside GST. However, coaching institutions and private hospitals providing non-essential services may have specific rate applicability that varies by service type.
Services Taxed at 5% GST
Transport and Travel Services at 5%
- Air travel (economy class): 5%
- Rail transport of passengers: 5%
- AC bus travel: 5%
- Tour operators on principal basis: 5%
- Hotel accommodation above ₹7,500 per room per night (without ITC): 5%
Food Services at 5%
- Restaurant services (non-AC, non-alcohol serving): 5%
- AC restaurant services: 5% (without ITC option)
- Takeaway food from restaurants: 5%
- Outdoor catering services: 5% (without ITC)
Other Services at 5%
Construction of affordable residential apartments, services by clinical establishments (specific categories), and services to government/local authorities under specific IGST provisions.
Services Taxed at 12% and 18% GST
12% GST Services
- Business class air travel: 12%
- Hotel accommodation ₹7,501–₹12,500 per room per night: 12%
- Construction of non-affordable residential properties
- Non-AC hotels serving alcohol: 12%
- IP rights transfer: 12%
18% GST Services (Most Professional and Business Services)
This is the most common rate for business services. The following categories are at 18%: All IT and software services, consulting services (management, finance, HR, legal advisory, marketing), advertising services, digital services and media, banking and financial services, telecom services, event management services, hotel accommodation above ₹12,500 per room per night, commercial training and coaching (private coaching institutes), and most professional services.
28% GST Services
Specific luxury and recreation services: 5-star hotel accommodation, luxury accommodation, gambling and betting services, amusement parks, and race clubs.
Frequently Asked Questions
Is GST applicable on export of services from India?
Export of services is zero-rated under GST (GST rate of 0%). This means: you don't charge GST to foreign clients, and you are eligible for refund of GST paid on your inputs (input tax credit). To qualify as export of services, the supply must: be to a recipient located outside India, payment must be received in convertible foreign currency, and the place of supply must be outside India. Service exporters file GST returns and claim ITC refund through the refund mechanism on the GST portal. This makes India's IT and professional service exports competitive — the effective GST cost of inputs is recovered, making the foreign currency billing price GST-neutral compared to Indian billing.
Do freelancers and individual service providers need to charge GST in India?
Freelancers and individual service providers with annual service income below ₹20 lakh (₹10 lakh for special category states) are below the mandatory GST registration threshold and do not charge GST. Above this threshold, GST registration is mandatory and GST must be charged on all taxable supplies. The 18% GST on most professional services applies to registered freelancers as well. An important note for B2B freelancers: if your clients are GST-registered businesses, they can claim input tax credit on your GST invoices — making your GST registration potentially beneficial to your clients even below the mandatory threshold, and sometimes improving your competitiveness.
What is the GST on healthcare services in India — are all medical services exempt?
The GST exemption for healthcare is not blanket — it is specific to clinical establishment services and authorised medical practitioner services. Exempt: doctor consultations, surgical procedures, diagnostic testing by labs authorised by the establishment, nursing and paramedical services as part of patient care. Not exempt (generally at 18%): cosmetic surgery not required for treating a disease, fitness services, spa treatments, private ambulance services as standalone businesses (not as part of patient care), and health club/gym memberships. Pharmaceutical products have their own specific GST rates (0–12% depending on the medicine category). The boundary between exempt healthcare services and taxable wellness/cosmetic services requires specific CA guidance for businesses in this sector.