What is GST on EOR services in India?

• Providers commonly use SAC 998513, 998515 or 998519, and all three carry 18%.
• Most advance rulings tax the gross invoice, salary included, though a 2018 Maharashtra ruling took the opposite view.
• Exports are zero-rated under section 16 of the IGST Act, either under LUT or by paying IGST and claiming a refund.
• Section 157 of the Finance Act, 2026 omitted the intermediary rule in section 13(8)(b) from 30 March 2026.

On this page

1. Does GST apply to the whole EOR invoice or only the fee?
2. When is an EOR invoice an export of services?
3. How does Remunance handle GST on your EOR invoices?
4. What else do people ask about GST on EOR services?

Does GST apply to the whole EOR invoice or only the fee?

To the whole invoice, in most rulings so far. Value of supply under section 15 of the CGST Act covers everything you are charged, so payroll passed through is taxed along with the EOR fee.

The escape route is the “pure agent” test in Rule 33 of the CGST Rules. Every condition must be met. The Gujarat advance ruling of October 2020 found a manpower supplier failed it, and Rajasthan’s authority, reported in April 2023, treated a salary reimbursement invoice as taxable consideration at 18%.

One ruling cuts the other way. In 2018, Maharashtra’s authority kept salary reimbursed for a foreign entity outside GST, with tax paid on the admin fee.

Advance rulings bind only the applicant. So treat the gross basis as the working position for gst on manpower services, and read no single ruling as settled law.

When is an EOR invoice an export of services?

When all five conditions in section 2(6) of the IGST Act hold at once:

1. The supplier is located in India.
2. The recipient is located outside India.
3. The place of supply is outside India.
4. Payment arrives in convertible foreign exchange, or in rupees where the RBI allows.
5. Supplier and recipient are not merely establishments of one distinct person.

Such supplies are zero-rated under section 16 of the IGST Act on CBIC’s tax portal.

The 2026 change matters here. Until 29 March 2026, section 13(8)(b) placed intermediary services at the supplier’s location, so they could never be exports. Grant Thornton Bharat’s note on the omission confirms it took effect on 30 March 2026. Hence even an invoice an officer labels “intermediary” can now qualify. The mirror image, intermediary services bought from abroad, moved under reverse charge.

Keep the bank’s e-FIRA. Our FIRC entry explains why.

The Indian client pays 18% because its own location fixes the place of supply in India. Tests 2 and 3 fail. A GST-registered Indian client can usually claim that tax back as input tax credit.

How does Remunance handle GST on your EOR invoices?

As your employer of record, Remunance Services Pvt Ltd is the Indian supplier on every invoice you receive. Salary, employer PF, gratuity accrual and insurance pass through at cost, and our flat fee starts at USD 99 per employee per month. Our guide to zero-rated GST for EOR services covers the export side in more depth. Model the numbers in the EOR cost calculator for India, then get a GST-ready cost breakdown for your first hire.

What else do people ask about GST on EOR services?