If you are running:

• Software development company
• IT services firm
• SaaS startup
• Freelance tech consultancy
• Digital agency

Then GST registration is not optional in many cases.

This guide explains:

• When GST is mandatory
• How to register
• Documents required
• Compliance rules
• Common mistakes

No confusion. No fluff.

1️⃣ Is GST Registration Mandatory for IT Companies?

It depends on your turnover and service type.

✅ GST Registration Is Mandatory If:

✔ Your annual turnover exceeds ₹20 lakhs (₹10 lakhs in special category states)
✔ You provide services to clients in other states
✔ You export IT services
✔ You sell SaaS subscriptions across India
✔ You work with companies that require GST invoice

Even if turnover is below ₹20L, many IT firms register voluntarily to:

• Claim Input Tax Credit (ITC)
• Work with corporate clients
• Appear compliant

2️⃣ GST Rate for IT Services

Most IT services fall under:

🔹 18% GST

Applicable to:

• Software development
• IT consulting
• SaaS subscriptions
• App development
• Website development
• Maintenance contracts

You must charge 18% GST on invoices (unless export rules apply).

3️⃣ GST on Export of IT Services

If you provide services to clients outside India:

You can treat it as:

🔹 Zero-Rated Supply (Export)

Conditions:

• Client located outside India
• Payment received in foreign currency
• Proper documentation maintained

You can:

✔ Export under LUT (Letter of Undertaking) without paying GST
OR
✔ Pay GST and claim refund

Most IT exporters use LUT.

4️⃣ Documents Required for GST Registration

For Proprietorship:

• PAN card of owner
• Aadhaar
• Business address proof
• Bank account details
• Photograph

For Private Limited Company:

• Company PAN
• Certificate of Incorporation
• MOA & AOA
• Director PAN & Aadhaar
• Board resolution
• Bank details
• Address proof

Everything is filed online on GST portal.

5️⃣ How to Apply for GST Registration (Step-by-Step)

1. Visit GST portal
2. Create login
3. Fill GST REG-01 form
4. Upload documents
5. Verify via OTP / DSC
6. ARN generated
7. GSTIN issued after verification

Processing time: 3–10 working days (if no query raised).

6️⃣ GST Compliance for IT Companies

Once registered, compliance is mandatory.

Monthly / Quarterly Filings:

• GSTR-1 → Sales return
• GSTR-3B → Summary return
• Annual return → GSTR-9

If turnover < ₹5 crore → Quarterly filing option available.

Late filing penalty:

₹50 per day (minimum ₹500 per return).

7️⃣ Input Tax Credit (ITC) for IT Companies

You can claim GST paid on:

• Office rent
• Internet bills
• Laptop purchase
• Software subscriptions
• Cloud hosting charges
• Professional services

But only if:

✔ Proper GST invoice available
✔ Vendor GST filed correctly

ITC reduces your GST liability.

8️⃣ GST for SaaS Companies

SaaS companies must:

• Charge 18% GST to Indian customers
• Follow export rules for foreign clients
• Track place of supply carefully

If serving multiple states, GST registration is mandatory.

9️⃣ Common GST Mistakes IT Companies Make

❌ Not registering after crossing turnover limit
❌ Not filing returns even if no sales
❌ Wrong HSN/SAC code usage
❌ Not collecting LUT for export
❌ Mixing personal and business accounts

Penalties + notices can be costly.

🔟 GST Registration Cost in India

If self-applied:

₹0 government fee

If through CA/consultant:

₹2,000 – ₹10,000 depending on services.

Monthly compliance cost (CA):

₹1,000 – ₹5,000 per month (depending on transactions).

Example Scenarios

Scenario 1: Freelance Developer (₹18L Turnover)

Not mandatory yet.
But registering helps work with corporate clients.

Scenario 2: IT Services Company (₹35L Turnover)

GST mandatory.
Must charge 18% GST and file returns.

Scenario 3: SaaS Startup with US Clients

Use LUT.
Export without charging GST.
Maintain FIRC proof.