A web developer finishes building a client’s site. A marketing consultant delivers a campaign report. A CA files returns for a client. A trainer runs a workshop for a corporate. None of them are shipping boxes — they’re billing for time, expertise, and outcomes. The invoice for services works the same way as a product invoice mechanically, but there are a few differences in what goes on it and how GST applies.
How to structure service line items
Services give you flexibility that goods don’t. A product invoice usually has quantity × unit price. A service invoice can be:
Hourly billing: Hours worked × hourly rate. A 40-hour project at ₹2,500/hour = ₹1,00,000. Put “40 hours” as the quantity and “₹2,500” as the rate. Simple, transparent, preferred by clients who want to see time tracked.
Project-based (fixed fee): Quantity 1, rate = total project fee. “Website design and development” × 1 × ₹1,20,000. Cleaner for the client, but make sure your scope of work is clearly described — disputes happen when the client’s definition of the project and yours differ.
Retainer billing: Monthly fixed fee for ongoing availability. Same as project-based but with the billing period in the description. “Monthly retainer — content strategy, September 2026” × 1 × ₹45,000.
Milestone billing: Separate line items for each deliverable. “Phase 1: Discovery and wireframes” + “Phase 2: Design” + “Phase 3: Development”. Useful for long projects where partial payment is due at each stage.
SAC codes for service invoices
Under GST, services use SAC (Services Accounting Code) instead of HSN codes. A few common ones:
| Service type | SAC code |
|---|---|
| IT services / software development | 998314 |
| Management consulting | 999411 |
| Accounting and bookkeeping | 998221 |
| Legal services | 998211 |
| Advertising and marketing | 998361 |
| Training and education | 999293 |
| Architecture / engineering | 998311 |
| Photography / videography | 999615 |
| Freelance writing / content | 999290 |
Add the SAC code in your item description field if you need it on the invoice. The generator doesn’t have a dedicated SAC field, so “Website development (SAC: 998314)” in the description is the clean way to include it.
GST rate for services
Most professional and business services attract 18% GST. Some categories are different: healthcare services are exempt, educational services are largely exempt, and some specific services like works contracts and restaurant services have different rates. For the vast majority of B2B service invoices — IT, consulting, marketing, legal, design, training — the rate is 18%.
If you’re billing an intra-state client (same state), split it as 9% CGST + 9% SGST. If inter-state, charge 18% IGST. The generator’s toggle handles this.
TDS deduction on service invoices
Clients deduct TDS on service payments to individuals and firms at 10% on professional/technical fees above ₹30,000 in a financial year (Section 194J). Include your PAN on every service invoice. The TDS is the client’s obligation to deduct and deposit with the government — you claim it as a credit when filing your return.
This means if you invoice ₹1,00,000 with 18% GST, the client pays you ₹1,18,000 minus 10% TDS on the base amount (₹10,000), so the net payment you receive is ₹1,08,000. The TDS on GST component is not deducted — only on the base invoice value.
E-invoicing for service businesses
If your business turnover exceeds ₹5 crore, you’re required to generate e-invoices (with IRN and QR code) through the government’s IRP portal for B2B invoices above ₹50 lakh. Below ₹5 crore turnover, e-invoicing is optional. This tool generates a standard invoice format. If e-invoicing applies to you, you’ll need to upload the invoice data to the IRP portal to generate the IRN.
Related: GST invoice template for the full GST-compliant format, and the freelancer invoice page for individual service providers specifically.