GST registration would be mandatory for most recruitment service providers as they may become a taxable person under GST, Apart from the aggregate annual sales turnover criteria.
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 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 a 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 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 GST portal.
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 SAC codes are listed 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 (pay rolling) 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 for all recruitment services and/or 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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