Free GST Filing for Agencies and Service Businesses in India

A client pays a ₹3 lakh advance for a campaign that starts next month. Another reimburses ₹1.2 lakh of media spend you paid on their behalf. A third disputes half an invoice. Each of these has a GST answer, and agencies get them wrong more often than you'd expect. If your agency or service firm has one GSTIN, HelloBooks files GSTR-1 and GSTR-3B for free, directly to the GST portal. For agencies, it's often the number of users, not the number of invoices, that decides whether Free is enough. More on that below.

Registration and rates for service firms

The threshold for service businesses is ₹20 lakh of aggregate turnover (₹10 lakh in the special category states). Most agencies cross it in their first good year, and many register earlier because corporate clients insist.

Almost every agency service is at 18%:

Pick the code that matches your contract, not your company name. Our HSN/SAC page helps.

Advances: GST is due when the money comes in

For services, GST is payable on an advance at the time you receive it, if no invoice has been issued yet. That ₹3 lakh campaign advance received on 25 Oct 2026 is taxable in the Oct 2026 return, even though the work starts in Nov 2026.

You issue a receipt voucher, pay GST on the advance in that month, and adjust it when the final invoice goes out. If the deal falls through and you refund the advance, you issue a refund voucher and adjust the tax. Agencies that bill only at the end of the project tend to underpay GST in the month the advance lands and catch up later, with interest.

Reimbursements and the "pure agent" rule

This is the agency question. When you pay something on a client's behalf, like media spend, travel, printing or government fees, and recover it, is that amount part of your taxable value?

Only if you don't meet the pure agent conditions in Rule 33. Broadly, the reimbursement is excluded from your taxable value if all of these hold:

• You have a contract to act as the client's pure agent for that expense.
• You don't hold or use the goods or services you're procuring.
• You recover the exact amount, separately shown on the invoice.
• The supply is in addition to your own services.

Media buying is where this gets real. If your agency buys ad inventory in its own name and resells it with a markup, you're the principal, and GST applies to the full amount. If the media is bought in the client's name (for example, the ad platform bills the client directly) and you only manage it, you charge GST on your fee. These arrangements vary, so read your contracts with a CA. Getting it wrong either overcharges clients or underpays tax.

Place of supply: CGST/SGST or IGST?

For most B2B services, the place of supply is the location of the registered client. Your Hyderabad agency billing a Mumbai client charges IGST 18%. Billing a client in Telangana means CGST 9% + SGST 9%. Events and immovable-property services have their own rules. A conference you organise is taxed where the event happens, and that can mean registration questions for big out-of-state events. Clients abroad may make the service an export, which is zero-rated under an LUT that you file yourself on the GST portal.

Reverse charge services agencies commonly receive

A few services you buy carry GST under reverse charge, which you pay in cash and then claim back as ITC:

• Legal services from an individual advocate or a law firm
• Sponsorship services received from a business entity
• Goods transport agency (GTA) services, unless the GTA has opted to charge forward
• Commercial rent from an unregistered landlord, in many cases since 10 Oct 2024

Agencies that sponsor events or use outside counsel for contracts should check these every month.

Worked example: a 12-person digital agency in Hyderabad

Here's Nov 2026 (illustrative):

Total ITC is ₹90,000: ₹81,000 on forward-charge bills plus the ₹9,000 RCM credit. That leaves ₹2,88,000 − ₹90,000 = ₹1,98,000 of output tax to pay in cash. Add the ₹9,000 of RCM tax, which must itself be paid in cash, and cash out this month is about ₹2,07,000.

Service businesses pay much more cash GST than traders because their biggest cost, salaries, carries no GST. That's normal. Plan your cash for the 20th.

GSTR-1 is due 11 Dec 2026 and GSTR-3B 20 Dec 2026. When the Dec 2026 project invoice goes out, the ₹36,000 already paid on the advance is adjusted.

Disputes, credit notes and bad debts

If a client disputes part of an invoice and you agree to reduce it, issue a GST credit note. For FY 2026-27 invoices, the deadline is 30 Nov 2027, or the date you file that year's annual return if earlier. Miss that and you can't reduce the tax.

There's no GST relief for a plain bad debt where the invoice stands but the client never pays. You've paid the tax and it stays paid. So chase your receivables before the next return, not after.

Free, or Pro for a team?

HelloBooks Free covers 200 transactions a year and 2 users. An agency with eight retainer clients raises about 96 sales invoices a year and receives maybe 60 to 80 bills, so the volume can just about fit. The user limit is usually what pushes agencies to upgrade. Once your account manager, finance executive and CA all need access, you're past 2.

Pro at ₹499/month gives unlimited users and roles, so your account managers can raise invoices without seeing the P&L. It also generates GSTR-9 ready to file, and covers every GSTIN of your entity if you open a branch in another state. See pricing, or read free vs paid GST software for the longer version of this trade-off.

How HelloBooks helps

HelloBooks files GSTR-1 and GSTR-3B directly to the GST portal from inside the app. Invoices, quotes and bills live in the same books, so a quote can become an invoice without retyping. GSTR-2B reconciliation tracks ITC on freelancer and software bills. AR aging shows which clients are slipping, which matters when you've already paid GST on their invoices. Razorpay and Cashfree collections can be reconciled, alongside bank statement import. And before you file GSTR-3B, you'll see the GST portal's own interest and late fee figure.

FAQs

Do I pay GST on an advance from a client?

For services, yes. GST is due in the month you receive the advance, unless you've already issued the invoice.

Is media spend reimbursed by a client taxable for the agency?

Not if you genuinely act as a pure agent under Rule 33 and recover the exact cost. If you buy media in your own name and resell it, GST applies to the full amount.

Should I charge IGST to a client in another state?

For most B2B services, yes, because the place of supply is the client's location. Events and property-related services follow different rules.

Can I get GST back if a client never pays?

No. Plain bad debts don't reduce GST. Only a valid credit note issued within the time limit does.

How many people can use HelloBooks Free?

Two. Pro at ₹499/month gives unlimited users and roles.

Get the advance and pure-agent treatment right in your contracts, and the monthly return mostly takes care of itself.

Start free — GST filing included, no card. Try HelloBooks Free