The rapid digitization of businesses has made mobile applications a crucial tool across industries. As this sector grows, it is vital for developers, freelancers, and companies to understand the Goods and Services Tax (GST) implications on mobile app development in India.
GST (Goods and Services Tax) is a comprehensive indirect tax levied on the manufacture, sale, and consumption of goods and services in India. It is categorized into:
CGST (Central GST)
SGST (State GST)
IGST (Integrated GST)
Mobile app development falls under the service sector and is thus subject to GST.
Whether you're an individual freelancer or a company offering app development services, GST applies if your turnover exceeds the threshold limit:
₹20 lakhs (₹10 lakhs for NE and hill states) for service providers.
Voluntary registration is also allowed below the threshold.
Mobile app development includes:
Custom development
UX/UI design
Maintenance & support
Integration with other platforms
All these services are classified under Information Technology (IT) services, which are taxable under GST.
| Type of Service | HSN/SAC Code | GST Rate |
|---|---|---|
| Software development services | 9983 | 18% |
| Custom mobile app development | 9983 | 18% |
| Cloud-based apps / SaaS | 9983 | 18% |
| Support & maintenance | 9983 | 18% |
If both the service provider and client are in India:
GST at 18% applies
IGST or CGST/SGST based on inter- or intra-state transaction
If the client is located outside India:
Treated as an export of services
Zero-rated under GST
No GST is payable, but Letter of Undertaking (LUT) is required
Businesses can claim ITC on expenses related to:
Software tools
Hosting services
Advertising & promotion
Office infrastructure
This helps reduce the overall GST liability.
You exceed the threshold limit
You make inter-state taxable supplies
You offer services to international clients
Monthly GSTR-1 and GSTR-3B returns
Annual return if turnover > ₹2 crores
Maintenance of invoice records
Revenue shared with app marketplaces is also subject to GST.
The developer or the marketplace may be responsible for remitting GST depending on the agreement and model (revenue-sharing vs reseller).
A developer based in Bangalore creates a fitness tracking app for a client in Mumbai.
Intra-state service → CGST + SGST @ 9% each
Another developer builds a similar app for a US-based startup.
Export of service → Zero-rated under GST
Understanding GST is essential for anyone involved in mobile app development. Whether you’re a freelancer, startup, or agency, being GST-compliant ensures smooth operations, better pricing, and legal protection. With an 18% GST rate applicable across most IT services, proper invoicing, record-keeping, and claiming input credits can help optimize your tax obligations and avoid penalties.