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

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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.

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Frequently Asked Questions

Common questions about SAC Code for Recruitment & HR Services.

According to the article, the GST rate for recruitment services and HR services in India is 18%. These services are classified under the SAC code group 99851 and are not mentioned in the list of services exempt from GST. Therefore, the default GST rate of 18% applies to these services.

As per the article, GST registration would be mandatory for most recruitment service providers as they may become a taxable person under GST through various criteria, such as engaging in inter-state supply, being a casual taxable person, or being a non-resident taxable person, apart from the aggregate annual sales turnover criteria.

The article mentions several types of recruitment services covered under the SAC code group 99851, including executive/retained personnel search services, permanent placement services, contract staffing services, temporary staffing services, long-term staffing (payrolling) services, temporary staffing-to-permanent placement services, co-employment staffing services, and other employment & labour supply services.

The article does not mention any specific recruitment services that are exempt from GST. It states that the services under the SAC code group 99851 are not listed in the services exempt from GST, implying that all recruitment services and HR services attract the default GST rate of 18%.

The SAC (Services Accounting Code) is a services classification system created by the service tax department for the levy of service tax. According to the article, the GST rates are linked to the SAC codes, and the recruitment services and HR services fall under the SAC code group 99851, which attracts a GST rate of 18%.

Yes, the article mentions that freelance professionals can be classified as casual taxable persons, and casual taxable persons are required to obtain GST registration, irrespective of their annual aggregate turnover. Similarly, non-resident taxable persons, who occasionally undertake transactions involving the supply of goods or services in India, are also required to obtain GST registration.

The article states that the majority of services in India attract an 18% GST rate. Therefore, the GST rate of 18% for recruitment services and HR services is in line with the rate applicable to most other services in India.

According to the article, the GST Council has not explicitly mentioned the rates for recruitment services and HR services. As these services are not mentioned in the list of exempted services, the default GST rate of 18% is applicable to them.

No, recruitment service providers cannot charge a different GST rate than the prescribed 18%. The article clearly states that the GST rate of 18% is applicable to all recruitment services and HR services classified under the SAC code group 99851, as per the GST Council's guidelines.

Yes, the article mentions that if a recruitment service provider engages in inter-state supply of services, GST registration would be mandatory, irrespective of the annual aggregate turnover. This is because inter-state supply is one of the criteria that can make a business a taxable person under GST.