The rate
Web hosting is taxed at 18% GST in India. So are VPS instances, dedicated servers, cloud hosting, domain registration, SSL certificates and control-panel licences. They fall under Online Information and Database Access or Retrieval services, and there is no lower slab and no exemption for small websites.
A plan advertised at ₹699/mo therefore costs ₹825/mo on the invoice. Honest hosts say "excluding GST" next to the price; less honest ones let you discover it at checkout.
Getting the 18% back
If you are GST-registered and the hosting is for business use, that 18% is input tax credit — it offsets the GST you collect from your own customers. In practice the hosting costs you the base price and the tax washes out.
Three conditions have to hold:
- You hold a valid tax invoice with your GSTIN printed on it.
- The service was actually received — not merely paid for in advance.
- The supplier reported it in their GSTR-1, so it appears in your GSTR-2B.
That third one is where claims fail. If your host does not file, or files late, the credit does not show up and your accountant cannot claim it. It is worth asking before you buy.
What a valid tax invoice has to show
- Supplier's name, address and GSTIN
- Your name, address and GSTIN
- A sequential invoice number and the date
- A description of the service
- The taxable value
- CGST and SGST separately if supplier and customer are in the same state, or IGST if they are in different states
- The place of supply
A PayPal receipt is not a tax invoice. Neither is a credit-card statement. If what arrives after payment has no GSTIN on it, you cannot claim anything against it.
CGST + SGST, or IGST?
It depends on where each party is. Our place of supply is Uttar Pradesh, so:
- A customer in Uttar Pradesh is billed 9% CGST + 9% SGST.
- A customer in any other state is billed 18% IGST.
The total is identical and the credit is identical. Only the split on the invoice changes.
Buying from a foreign host
This is where it gets tedious.
If you are GST-registered, importing a service triggers the reverse charge mechanism: you pay the 18% directly to the government yourself, report it, and then claim it back as input credit. Net cost is the same, but you are doing the supplier's paperwork.
If you are not GST-registered, the foreign supplier is supposed to register in India under the OIDAR rules and charge you GST. Many of the large ones do. Some do not, which leaves an obligation sitting somewhere uncomfortable.
Add the forex markup your card issuer charges — usually 2–3.5% — and the "cheaper" foreign host is frequently not cheaper at all.
A worked comparison
| Indian host | Foreign host | |
|---|---|---|
| List price | ₹699/mo | $6.00/mo ≈ ₹528 |
| Forex markup (~3%) | — | ₹16 |
| GST | ₹126 (18%) | ₹98 (reverse charge) |
| Cash out | ₹825 | ₹642 |
| Input credit claimable | ₹126, automatically | ₹98, after you self-report |
| Net cost | ₹699 | ₹544 |
Rates are illustrative. The point is the direction, not the decimal: local billing is usually cheaper and always simpler.
If you are not GST-registered
You pay the 18% and cannot claim it, so it is a real cost. Compare hosts on the GST-inclusive figure. There is no legitimate way to avoid the tax, and any host offering to bill you without it is offering you a problem, not a discount.
How we handle it
Every payment produces a GST tax invoice with your GSTIN on it, available in the client area and emailed to you. We file on time, so the credit appears in your GSTR-2B where your accountant expects it. Prices across the site are shown excluding GST, and the 18% is added at checkout — never hidden and never a surprise.
Need an invoice reissued with a corrected GSTIN? Email support@bigdomainhost.com and we will do it the same day.
This is a general explanation, not tax advice. Your accountant knows your situation; we do not.