GST Compliance for ISPs: Billing Software Requirements 2025

Why GST Compliance Matters for ISPs

As an internet service provider in India, you're required to collect GST from customers and file regular GST returns with the government. Non-compliance can result in heavy penalties, interest charges, and legal issues.

The good news? With proper GST-compliant billing software, maintaining compliance becomes automatic. Your invoices will have all required details, GST calculations happen automatically, and reports for GST filing are generated at the click of a button.

GST Rate for Internet Services in India

As of 2025, the GST rate for internet services (broadband, fiber, wireless internet) in India is:

📊 GST Rate for ISP Services

18% GST (9% CGST + 9% SGST for intra-state supply)

18% IGST (for inter-state supply)

Example Calculation

Plan Price: ₹1,000/month
GST @ 18%: ₹180
Total Amount: ₹1,180

If your ISP is registered in Maharashtra and customer is also in Maharashtra: CGST ₹90 + SGST ₹90 = ₹180

If your ISP is in Maharashtra but customer is in Gujarat: IGST ₹180

When Do You Need GST Registration?

You MUST register for GST if:

✓ Your annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states)
✓ You provide services across state borders (inter-state supply)
✓ You're registered under pre-GST laws (Service Tax, VAT)

For most ISPs: If you have 100+ subscribers paying ₹500-1000/month, you're likely crossing ₹20 lakhs annual turnover, so GST registration is mandatory.

⚠️ Important Note

Operating as an ISP without GST registration (when required) can result in penalties up to 100% of tax amount plus interest. Don't risk it!

HSN Code for Internet Services

HSN (Harmonized System of Nomenclature) Code for internet and broadband services in India:

📋 HSN Code for ISP

HSN Code: 9983 - Telecommunication Services

Specifically: 998391 - Internet Telecommunication Services

Your GST invoices must include this HSN code for proper classification.

GST Invoice Requirements for ISPs

According to GST rules, every invoice you issue to customers must contain:

Mandatory Fields on Invoice

Invoice Number: Unique sequential number
Invoice Date: Date of issue
Customer Name: Full name of subscriber
Customer Address: Billing address
Customer GSTIN: If customer is GST registered (optional for consumers)
Your GSTIN: Your GST registration number
Your Business Name & Address: As per GST certificate
Description of Service: "Internet Service - Fiber Broadband 100 Mbps"
HSN/SAC Code: 998391
Taxable Value: ₹1,000 (pre-GST amount)
GST Rate: 18%
GST Amount: CGST ₹90 + SGST ₹90 = ₹180 (or IGST ₹180)
Total Invoice Value: ₹1,180
Place of Supply: Customer's location
Whether Reverse Charge Applicable: Usually "No" for ISP

Sample GST Invoice Format

TAX INVOICE

YourISP Networks Private Limited
Shop No. 5, ABC Complex, Mumbai - 400001
GSTIN: 27AAAAA1234A1Z5
Phone: +91-98765-43210

Invoice No: INV-2025-001234
Invoice Date: 19-11-2025

Bill To:
Rajesh Kumar
Flat 301, XYZ Apartments
Mumbai - 400002

Description	HSN/SAC	Amount
Internet Service - Fiber 100 Mbps (Period: 01-Dec-2025 to 31-Dec-2025)	998391	₹1,000.00

Taxable Amount:	₹1,000.00
CGST @ 9%:	₹90.00
SGST @ 9%:	₹90.00
Total Amount:	₹1,180.00

Place of Supply: Maharashtra
Reverse Charge: No
This is a computer generated invoice

GST Returns for ISPs

As a GST-registered ISP, you need to file these returns:

Monthly/Quarterly Returns

GSTR-1: Details of outward supplies (sales to customers) - Monthly or Quarterly
GSTR-3B: Summary return with tax payment - Monthly

Annual Returns

GSTR-9: Annual return - Once a year
GSTR-9C: Reconciliation statement (if turnover > ₹5 crore) - Once a year

Due Dates

GSTR-1: 11th of next month (monthly) or 13th of month after quarter (quarterly)
GSTR-3B: 20th of next month
GSTR-9: 31st December of next financial year

💡 Pro Tip

Good billing software generates all required reports for GST returns automatically. You just download the report and upload to GST portal. Saves hours of manual work!

Common GST Mistakes ISPs Make

❌ Mistakes to Avoid

1. Not Including GST in Plan Prices

Wrong: Advertising "₹1,000/month" but charging ₹1,180 at billing time

Right: Clearly state "₹1,000 + GST" or show final price "₹1,180 inclusive of GST"

2. Missing GSTIN on Invoices

Your GSTIN must be clearly visible on every invoice. Missing GSTIN = Invalid invoice.

3. Wrong HSN Code

Using incorrect HSN code can cause GST return filing issues. Always use 998391 for internet services.

4. Not Maintaining Invoice Sequence

Invoice numbers must be sequential without gaps. INV-001, INV-002, INV-003 (not INV-001, INV-005, INV-003).

5. Mixing CGST/SGST and IGST

Within same state: Use CGST+SGST. Across states: Use IGST. Don't mix them.

6. Late GST Return Filing

Late filing attracts ₹200/day penalty (₹100 CGST + ₹100 SGST). File on time!

7. Not Collecting GST from Customers

You're liable to pay GST to government even if you didn't collect from customer. Always collect!

8. Manual Calculations Leading to Errors

Manual GST calculation errors can cause mismatches in returns. Use billing software!

How Billing Software Ensures GST Compliance

Good ISP billing software automates GST compliance:

1. Automatic GST Calculation

✓ Automatically calculates 18% GST on all charges
✓ Automatically splits into CGST+SGST or IGST based on location
✓ No manual calculation errors

2. GST-Compliant Invoice Generation

✓ All mandatory fields included automatically
✓ GSTIN, HSN code, tax breakup shown correctly
✓ Sequential invoice numbering maintained
✓ Professional invoice format

3. GST Reports for Filing

✓ GSTR-1 report (all sales) generated automatically
✓ GSTR-3B summary report with total tax liability
✓ Export to Excel/PDF for easy filing
✓ Month-wise, customer-wise reports

4. Input Tax Credit (ITC) Management

✓ Track GST paid on expenses (equipment, software, etc.)
✓ Claim input tax credit to reduce liability
✓ Maintain records for ITC claims

5. Compliance Alerts

✓ Reminders for GST return due dates
✓ Alerts for any compliance issues
✓ Notifications for GST law changes

GST Compliance Checklist for ISPs

✅ Monthly Compliance Checklist

☐ Generate all invoices with proper GST details
☐ Collect GST from all customers
☐ Generate GSTR-1 report from billing software
☐ File GSTR-1 by due date (11th or 13th)
☐ Generate GSTR-3B report
☐ Pay GST liability before filing GSTR-3B
☐ File GSTR-3B by 20th of next month
☐ Maintain invoice copies for records
☐ Reconcile GST collected vs. filed

GST Features to Look for in Billing Software

When choosing billing software, ensure these GST features are included:

✅ Must-Have Features

Automatic 18% GST calculation
CGST/SGST/IGST split based on location
HSN code 998391 included
GSTIN field on invoices
Sequential invoice numbering

✅ Important Features

GSTR-1 report generation
GSTR-3B report generation
Month-wise GST summary
Customer-wise GST breakdown
Export reports to Excel/PDF

✅ Nice-to-Have Features

Input tax credit tracking
GST return due date reminders
HSN-wise sales summary
Place of supply detection
GST rate change updates

✅ Advanced Features

Direct GST portal integration
E-invoicing support (if required)
Multiple GSTIN support
Reverse charge mechanism
TDS on GST tracking

GST Audit for ISPs: What to Expect

GST department may conduct audits to verify compliance. Be prepared:

Documents You Should Maintain

✓ All invoice copies (minimum 6 years)
✓ GST return filed copies
✓ GST payment receipts/challans
✓ Bank statements showing GST payments
✓ Customer contracts/agreements
✓ Purchase invoices (for input tax credit)
✓ Reconciliation statements

Common Audit Issues

❌ Mismatch between invoices and GST returns
❌ Missing or duplicate invoice numbers
❌ Wrong GST rate applied
❌ Improper input tax credit claims
❌ Not collecting GST from customers but claiming credit

Good billing software helps avoid all these issues by maintaining accurate records and ensuring data consistency.

Penalties for Non-Compliance

GST violations can be expensive:

Late filing GSTR-1: ₹200/day (₹100 CGST + ₹100 SGST)
Late filing GSTR-3B: ₹200/day or 0.25% of turnover (whichever is higher)
Not issuing proper invoices: Penalty up to ₹25,000
Not collecting/paying GST: 100% of tax amount + interest @ 18% per annum
Fraud/evasion: Up to 100% of tax amount + imprisonment

⚠️ Cost of Non-Compliance

Example: If you miss filing returns for 3 months and have ₹50,000/month GST liability:

Tax Amount: ₹1,50,000
Interest @ 18% for 3 months: ₹6,750
Late filing penalty: ₹200/day × 90 days = ₹18,000
Total Cost: ₹1,74,750 instead of ₹1,50,000!

Stay compliant. It's cheaper!

Best Practices for GST Compliance

Use GST-compliant billing software: Don't rely on manual processes
File returns on time: Set reminders, don't miss deadlines
Reconcile monthly: Match your books with GST returns
Maintain proper records: All invoices, returns, payment proof
Clear pricing: Always mention if price includes GST or not
Collect GST from day one: Don't give services without collecting GST
Hire CA if needed: For complex situations, get professional help
Stay updated: GST laws change, keep yourself informed
Claim ITC properly: Don't leave money on the table
Regular internal audits: Catch errors before government does

Which Billing Software Has Best GST Features?

Comparison of GST features in popular ISP billing software:

Software	Auto GST Calc	GSTR Reports	HSN Code	Rating
BrightCRM	✅ Yes	✅ GSTR-1, 3B	✅ Included	⭐⭐⭐⭐⭐
ISP Mate	✅ Yes	✅ GSTR-1, 3B	✅ Included	⭐⭐⭐⭐⭐
NetOrbit	✅ Yes	✅ GSTR-1, 3B	✅ Included	⭐⭐⭐⭐
Splynx	⚠️ Manual setup	⚠️ Limited	⚠️ Need to add	⭐⭐⭐
ISP Toolkit	✅ Yes	⚠️ Basic	✅ Included	⭐⭐⭐

Conclusion

GST compliance is mandatory for ISPs in India. While it may seem complicated, using proper billing software makes it effortless. Your software should automatically calculate GST, generate compliant invoices, and produce reports for GST filing.

Key takeaways:

✓ GST rate for internet services: 18% (CGST 9% + SGST 9% or IGST 18%)
✓ HSN code for internet services: 998391
✓ Mandatory GST registration if turnover > ₹20 lakhs
✓ File GSTR-1 by 11th and GSTR-3B by 20th every month
✓ Use GST-compliant billing software to automate compliance
✓ Maintain all invoice and return copies for 6+ years
✓ Non-compliance is expensive - stay compliant

Don't risk penalties and legal issues. Choose billing software with built-in GST compliance and file returns on time!

Want GST-Compliant Invoicing Made Easy?

BrightCRM automatically handles all GST calculations, generates compliant invoices, and provides GSTR reports. Stay compliant effortlessly.

See GST Features Demo