GST on web hosting and domains in India: rates, SAC codes and reclaiming your ITC
TL;DR: Web hosting, domain registration, SSL certificates and cloud services all attract 18% GST in India under SAC 998315. If your business is GST registered and the service is used for business purposes, that 18% is not a cost. It is input tax credit you set off against your own output liability.
Most small Indian businesses lose this credit for one of three reasons: they never gave the provider their GSTIN so the invoice was raised to an unregistered person, the invoice is missing a field required for a valid ITC claim, or they bought from a foreign provider and never accounted for it under reverse charge. All three are avoidable and the first one is only fixable going forward.
The rate, and what it applies to
Web hosting is taxed at 18% GST. So is domain registration, cloud infrastructure, VPS, dedicated servers, managed hosting, SSL certificates, CDN services, business email, and effectively every adjacent digital service you buy to run a website.
The September 2025 GST reform simplified India's slab structure to two main rates plus a special higher slab, and IT and software services remained at 18% throughout. There was no reduction for hosting and there is no concessional rate for small businesses, startups or MSMEs. The rate does not vary by the buyer's size or registration status.
What that 18% means depends entirely on which side of the registration line you sit.
If you are not GST registered, 18% is a real cost. A ₹99 hosting plan costs you ₹116.82. That is the end of the story.
If you are GST registered and using the hosting for business, the 18% is not a cost at all. It is input tax credit, which you set off against the GST you collect from your own customers. Your effective hosting cost is the base amount.
For a business spending ₹5,000 a month across hosting, domains and cloud services, that is ₹900 a month, ₹10,800 a year, sitting in credit you either claim or forfeit. Small businesses forfeit it constantly, usually because nobody ever entered a GSTIN into the billing profile.
One thing to be clear about: this is general information about how GST applies to a category of purchase, not tax advice for your specific situation. Rates and classification rules change, thresholds vary by state, and your own facts matter. Confirm with your CA before making decisions on it.
SAC codes and why they matter on your invoice
SAC stands for Services Accounting Code, the services equivalent of an HSN code for goods. It classifies what was supplied, and it belongs on the invoice.
For hosting, the relevant code is 998315, covering hosting and information technology infrastructure provisioning services. That is the code you should expect to see on a hosting invoice, and it covers shared hosting, VPS, cloud, dedicated servers and managed hosting alike.
Adjacent codes you will encounter in the same family:
998313 for IT consulting and support services, which is where server management and technical support retainers often sit. 998314 for IT design and development, covering software and website development. 998316 appears in some classifications for hosting and cloud, and you will see providers using it. The rate is 18% across all of them, so the classification affects your invoice fields and return filing rather than the amount you pay.
There is a threshold worth knowing on the reporting side. Businesses above ₹5 crore in annual turnover must show the full six-digit SAC on every invoice. Below that, the four-digit heading is permitted, though using the full code is better practice regardless.
Why this matters to you as a buyer: an invoice with a missing or plainly wrong SAC is a weaker document if your ITC is ever questioned. It is not usually fatal on its own, but it is one of the things that turns a routine scrutiny into a longer conversation. If your hosting provider issues invoices with no SAC at all, ask for corrected ones.
CGST plus SGST or IGST: place of supply
The 18% splits differently depending on where your provider and you are located, and getting this wrong creates a genuine problem.
Intra-state. Provider and customer in the same state. The 18% splits into 9% CGST and 9% SGST. A Maharashtra business buying from a Maharashtra-registered provider sees both lines on the invoice.
Inter-state. Provider and customer in different states. The full 18% is charged as IGST. A Maharashtra business buying from a Karnataka-registered provider sees a single IGST line.
Place of supply for these services, where the recipient is registered, is generally the recipient's location as recorded in the supplier's records. Which is why the address on your billing profile is not a cosmetic detail. If it is wrong, the tax gets charged under the wrong head.
The reason this matters is that CGST, SGST and IGST are not freely interchangeable in the credit ledger. Credit utilisation follows a prescribed order, and SGST credit of one state cannot be used against another state's liability. An invoice raised with CGST and SGST when it should have been IGST leaves you holding credit you may struggle to use, and correcting it requires the supplier to amend the invoice.
Practical rule: check the first invoice from any new provider. Confirm the tax head matches the relationship between their state and yours. Catching it on invoice one is a two-minute email. Catching it at year end is a reconciliation exercise.
Claiming input tax credit on hosting
Input tax credit is the mechanism that stops GST cascading through a supply chain. You pay GST on your inputs, you collect GST on your outputs, and you remit the difference.
Hosting, domains, SSL, cloud infrastructure and software subscriptions are all eligible inputs where used for business purposes. So are the adjacent things you buy: internet connections, laptops, office rent, subcontractor invoices.
The conditions that must be satisfied for the credit to be available:
You must be GST registered. Without a GSTIN there is no ITC. This is why the registration threshold decision matters more than the turnover number alone suggests.
You must hold a valid tax invoice. Not a payment receipt, not an order confirmation email, not a screenshot of a card statement. A tax invoice with the required fields.
The supplier must have actually filed and paid. Your credit depends on the supplier reporting the supply in their returns. This is the part buyers cannot control directly, and it is why the invoice must appear in your GSTR-2B before you claim it.
You must have received the service. Straightforward for hosting, which is delivered continuously.
The service must be used for business. Personal use is not creditable. A hosting plan running a personal blog with no business connection does not qualify.
You must claim within the prescribed time limit. ITC is not available indefinitely; there is a cut-off tied to the return filing cycle for the following financial year. Missing it means the credit is gone permanently.
The workflow in practice: your provider raises an invoice against your GSTIN, reports it in their GSTR-1, it appears in your GSTR-2B, you reconcile it against your purchase records, and you claim it in GSTR-3B. Reconciliation is the step small businesses skip, and it is where the discrepancies surface.
What a valid tax invoice must contain
The fields that determine whether your claim survives scrutiny:
The supplier's name, address and GSTIN. Invoice number and date. Your name, address and GSTIN, correctly stated. A description of the service. The SAC code. The taxable value before tax. The rate and amount of tax, split into CGST and SGST, or shown as IGST. The place of supply, for inter-state supplies. And a signature or digital signature.
The two that get missed most often are your GSTIN and the correct tax head.
Your GSTIN missing is the expensive one, because an invoice raised to you as an unregistered person cannot support an ITC claim. It is not a formatting problem. The supplier has treated the supply as B2C, reported it as such, and it will not appear in your GSTR-2B.
The fix is entirely preventative: enter your GSTIN and correct registered address into the billing profile of every provider before you buy anything. Hosting providers, domain registrars, cloud platforms, SaaS tools. Most have a field for it and most people leave it blank.
Retroactive correction is possible but depends entirely on the supplier's willingness to amend and re-report, and there are time limits on amendments. Many providers will do it for the current period and decline for older ones.
| Service | Typical SAC | Rate | ITC if GST registered | Notes |
|---|---|---|---|---|
| Shared / WordPress hosting | 998315 | 18% | Yes | Standard supply of services |
| VPS / cloud / dedicated | 998315 | 18% | Yes | Same treatment as shared |
| Domain registration | 998315 / IT services | 18% | Yes | Show as separate line if bundled |
| SSL certificates | 998315 | 18% | Yes | Often bundled, still creditable |
| Business email / Workspace | 998315 | 18% | Yes | Per-seat billing, same rate |
| Server management retainer | 998313 | 18% | Yes | Support service classification |
| Website development | 998314 / 998313 | 18% | Yes | Separate line from hosting |
| Foreign host, no India entity | Import of service | 18% | Yes, after paying under RCM | You self-account, then claim |
| Foreign vendor via India entity | 998315 | 18% | Yes | Normal forward charge invoice |
| Hosting for personal blog | 998315 | 18% | No | Not a business input |
Buying hosting from a foreign provider
This is where most Indian businesses have an unnoticed compliance gap, because buying cloud services from an overseas provider is completely routine and the tax treatment is not.
The distinction that decides everything is whether the invoice comes from an Indian entity or a foreign one.
Foreign vendor billing through a GST-registered Indian entity. This is a normal domestic supply. You receive a regular tax invoice with GST charged, and you claim ITC in the usual way. Nothing unusual to do. Several large international providers operate this way for Indian customers.
Foreign vendor billing directly from overseas, with no Indian billing entity. This is an import of services, and reverse charge applies. The liability shifts to you as the recipient.
Under reverse charge you self-assess the GST at 18% on the value of the service, pay it, and then claim it back as input tax credit in the same or a subsequent period, subject to the usual conditions. The net cash effect for a fully creditable input is close to neutral, but the compliance steps are not optional and skipping them is a reporting failure rather than a saving.
Two practical consequences people miss.
The first is that subscribing to even one foreign service can trigger the requirement to register for GST regardless of your turnover, because reverse charge liability is not subject to the ordinary threshold. A small business under ₹20 lakh that assumed it was outside the system may not be.
The second is that this applies far more broadly than hosting. Every foreign SaaS subscription your business runs on falls in the same category if billed from overseas.
Check your invoices. If the billing entity has an Indian address and a GSTIN, you are in forward charge and there is nothing extra to do. If it is a foreign address with no GSTIN, reverse charge applies and your accountant needs to know.
If you resell hosting to your own clients
Agencies and freelancers frequently buy hosting and bill it onward. There are two ways to do that and they have different tax consequences.
As a principal. You buy the hosting, you sell hosting to the client under your own name at your own price. You claim ITC on what you bought, charge 18% GST on what you sell, and remit the difference. This is the reseller hosting model and it is clean.
As a pure reimbursement. You pay the hosting bill on the client's behalf and recover exactly what you paid, with documentation showing it is a recovery at actuals. Where the conditions for pure agent treatment are met, that recovery is excluded from your taxable value.
The distinction is not cosmetic and the conditions for the second are specific. Charging a markup, invoicing in your own name, or treating the service as part of your own supply generally takes you out of pure agent territory and into principal. Most agencies are principals whether or not they think of themselves that way.
The common error is billing the client the exact amount you paid including GST, without charging GST on your own invoice, while also claiming the ITC. That is a mismatch: you have claimed credit on an input and not accounted for output tax on the corresponding supply.
For bundled invoices, show hosting, domain, development and maintenance as separate line items with their own SAC codes. The rate is 18% across all of them so the total is identical, but separate lines give your client a clean ITC claim and keep your own classification defensible. Bundled contracts get classified by principal supply, which is a judgement you would rather not have to defend.
Mistakes that cost people their credit
GSTIN not on the billing profile. The single most common and the most expensive, because it cannot be fixed retroactively beyond the amendment window. Every provider, every account, today.
Never reconciling GSTR-2B. If the supplier did not report the supply, your credit is not available regardless of what your invoice says. Reconciling monthly means you catch a non-reporting supplier while it is still correctable.
Treating receipts as invoices. A card statement, a PayPal confirmation or an emailed receipt is not a tax invoice. Download the actual tax invoice from the provider's billing portal.
Ignoring reverse charge on foreign subscriptions. Widespread, and it grows with every SaaS tool added.
Wrong tax head on the invoice. CGST and SGST charged where IGST was due, or vice versa. Leaves credit stranded in a form you cannot easily use.
Missing the claim deadline. ITC has a cut-off. Credit not claimed in time is forfeited permanently, not carried forward indefinitely.
Mixing personal and business hosting on one account. Only the business portion is creditable, and a single invoice covering both is difficult to apportion cleanly. Separate accounts.
Wrong or outdated registered address. Drives place-of-supply determination. Update it when you move states.
FAQs
What is the GST rate on web hosting in India?
Web hosting attracts 18% GST, unchanged by the September 2025 GST reform which retained IT and software services at that rate. The same 18% applies to shared hosting, VPS, cloud, dedicated servers, managed hosting, domains, SSL certificates and business email. There is no concessional rate based on the customer's size or registration status.
What is the SAC code for web hosting services?
The primary code is 998315, covering hosting and information technology infrastructure provisioning services. Related codes in the same family include 998313 for IT consulting and support and 998314 for IT design and development. All carry 18% GST, so classification affects invoice fields and return filing rather than the amount payable.
Can I claim input tax credit on hosting and domain charges?
Yes, if you are GST registered, hold a valid tax invoice showing your GSTIN, the supplier has reported the supply so it appears in your GSTR-2B, and the service is used for business purposes. Hosting, domains, SSL, cloud infrastructure and software subscriptions are all eligible business inputs. Claims must be made within the prescribed time limit or the credit is lost.
Why is my GSTIN not on my hosting invoice?
Because it was not entered in the provider's billing profile before the invoice was raised, so the supply was treated as B2C. An invoice without your GSTIN cannot support an ITC claim and will not appear in your GSTR-2B. Some providers will amend recent invoices on request, but amendments have time limits, so add your GSTIN to every provider account now.
Do I pay GST on hosting bought from a foreign provider?
If the foreign provider bills through a GST-registered Indian entity, you receive a normal tax invoice with GST charged and claim ITC as usual. If billed directly from overseas with no Indian entity, it is an import of services and reverse charge applies, meaning you self-assess and pay the 18% and then claim it as credit subject to the usual conditions.
Does buying foreign SaaS trigger GST registration?
It can. Reverse charge liability on imported services is not subject to the ordinary turnover threshold, so a business below ₹20 lakh subscribing to overseas-billed services may still need to register. This surprises small businesses that assumed the threshold protected them, and it applies to every foreign-billed SaaS tool, not only hosting.
Is it CGST and SGST or IGST on my hosting invoice?
CGST plus SGST at 9% each if your provider and your registered address are in the same state, and IGST at 18% if they are in different states. The heads are not freely interchangeable in the credit ledger, so an invoice charged under the wrong head leaves you with credit that is difficult to use. Check the first invoice from any new provider.
What must a tax invoice contain for me to claim ITC?
Supplier name, address and GSTIN; invoice number and date; your name, address and GSTIN; a description of the service; the SAC code; taxable value; the rate and amount of tax split into CGST and SGST or shown as IGST; place of supply for inter-state supplies; and a signature. The two most commonly missing are your GSTIN and the correct tax head.
Can I claim ITC on hosting for a personal blog?
No. Input tax credit is available only on inputs used for business purposes, and a personal site with no business connection does not qualify. If a single hosting account runs both business and personal sites, apportionment becomes messy, so keep them on separate accounts with separate invoices.
Do I need GST registration to buy hosting in India?
No. Anyone can buy hosting and pay the 18% GST. Registration determines whether you can reclaim it. Without a GSTIN the 18% is a genuine cost; with one, and with correct invoicing, it becomes credit against your own liability.
How should an agency bill hosting to a client?
Most agencies are acting as principals: buy the hosting, claim ITC on it, then charge the client under your own invoice with 18% GST on your price. Pure reimbursement treatment requires meeting specific conditions and generally does not apply where you add a markup or invoice in your own name. Show hosting, domain and development as separate line items with their own SAC codes.
What is the GST registration threshold for a web business?
₹20 lakh aggregate turnover, reduced to ₹10 lakh in certain special category states. Registration is required regardless of turnover in some situations, including inter-state supply of services and reverse charge liability on imported services, which is why most businesses buying foreign SaaS end up registered anyway.
Conclusion
For a registered business, the 18% GST on hosting is not a cost. It is a cash flow item that nets to zero if you handle the paperwork, and a permanent loss if you do not.
The difference between those two outcomes is almost entirely administrative. Enter your GSTIN in every provider's billing profile. Download actual tax invoices rather than filing receipts. Check that the tax head matches your state relationship. Reconcile GSTR-2B monthly so a non-reporting supplier surfaces while it is still fixable. Claim inside the time limit.
The one that catches sophisticated businesses is reverse charge on overseas-billed services. It is easy to accumulate a dozen foreign SaaS subscriptions without anyone assessing the treatment, and the exposure grows quietly.
If you take one action from this: open your hosting, domain, cloud and SaaS accounts today and check whether your GSTIN is on file. That single pass typically recovers more than the rest of this article combined, and it only works forward, never backward.
This is general information rather than tax advice, and GST rules change. Confirm the specifics with your CA before acting on any of it.
HostCloud issues proper GST tax invoices with your GSTIN, the correct SAC code and the right CGST, SGST or IGST split based on your registered state, downloadable from your billing panel. Plans start at ₹99 a month at https://hostcloud.in.