In the world of business, knowledge of GST rates is essential, especially for industries like Recruitment and HR services. This article delves into the significance of understanding SAC (Services Accounting Code) and the GST rates for labor-related services.
The Role of SAC Codes and GST Rates
The Services Accounting Code (SAC) is a system used to categorize various services under the Goods and Services Tax (GST) regime. For Recruitment and HR Services, SAC Codes 99851 come into play. These codes encompass a wide range of services, including executive personnel search, contract staffing, and more.
Let’s break down what falls under Group 99851 of the SAC Code:
- Executive/Retained Personnel Search Services
- Permanent Placement Services (excluding executive search)
- Contract Staffing Services
- Temporary Staffing Services
- Long-Term Staffing (Payrolling) Services
- Temporary Staffing-to-Permanent Placement Services
- Co-Employment Staffing Services
- Other Employment & Labor Supply Services
Here are the SAC Codes corresponding to these services:
– 998511: Executive/Retained Personnel Search Services
– 998512: Permanent Placement Services (excluding executive search)
– 998513: Contract Staffing Services
– 998514: Temporary Staffing Services
– 998515: Long-Term Staffing (Payrolling) Services
– 998516: Temporary Staffing-to-Permanent Placement Services
– 998517: Co-Employment Staffing Services
– 998519: Other Employment & Labor Supply Services
Understanding GST Rules for Recruitment and HR Services
GST rates vary based on the type of goods or services. In the case of Recruitment and HR Services, the applicable GST rate is 18%. It’s important to note that these services do not fall under the list of GST-exempt services.
Now, let’s explore the situations in which recruitment service providers may need to register for GST:
Even if a business’s total annual income doesn’t cross the GST council’s threshold, registration is mandatory if it engages in interstate commerce.
Casual Taxable Person:
Individuals occasionally involved in HR and recruitment services within a state or union territory where they lack an established place of business need GST registration. Many independent contractors fall under this category.
Non-Resident Taxable Person:
Foreign freelance recruiting service providers operating in India without a fixed place of business or residence in the country are required to register for GST.
The Bottom Line:
the GST rate for Recruitment and HR Services, encompassing various subcategories, is 18%. These services are not exempt from GST, and they are subject to the default GST rate of 18% for all services. If you’re considering GST registration for your HR or recruitment business, consult experts for guidance and utilize tools like GST calculators to determine the exact GST amount you’ll need to pay.
For more information about SAC codes for labor charges or specific GST rates for recruitment and HR services, seek assistance from knowledgeable professionals who can provide you with expert advice. Don’t hesitate to request a free consultation with qualified attorneys to address your GST-related concerns effectively.
It’s essential for businesses to correctly determine and apply the appropriate HSN code to their products to ensure accurate taxation. The HSN code is typically included in invoices and other relevant documents for GST compliance.
Businesses must be aware of the HSN codes applicable to their products, as these codes determine the tax rates and other regulatory requirements associated with them.
Do you need help Finding Your Products or service HSN or SAC code? CaptainBiz is the ultimate GST billing software that helps you provide the same and also Provides simple invoicing, real-time inventory management, and cost reduction, allowing you to grow your business seamlessly.
Frequently Asked Questions:
What is the GST rate and SAC code for labour services?
If your client is providing only labour services, these can fall under SAC code 998873, which pertains to ‘Other fabricated metal product manufacturing and metal treatment services.’ This category is subject to a 12% GST rate.
What is the GST rate for HR services?
Recruiting and HR services are both subject to an 18% GST charge.
Is GST applicable to employee salaries?
No, GST does not apply to employee salaries. Schedule III of the CGST Act specifically excludes services provided by an employee to the employer in the course of their employment from the scope of goods or services subject to GST.