GST for Housekeeping Agencies – Complete Guide to 18% Tax, TDS & RCM
Clear answers for housekeeping agencies, cleaning services, and janitorial businesses — is GST 18% on housekeeping services, is TDS 194C or 194J, does reverse charge apply on sub-contracted cleaning staff, can you claim ITC on cleaning supplies, and how to invoice corporate clients. Includes office, residential, hospital, and industrial cleaning scenarios.
Quick Summary – GST Rules for Housekeeping Agencies
- Is GST applicable to housekeeping agencies? Yes — all housekeeping and cleaning services are taxable at 18% GST. There is no exemption for offices, homes, hospitals, or industrial sites.
- GST rate: 18% (CGST 9% + SGST 9% or IGST 18%). No concessional slab for housekeeping.
- GST registration: Mandatory above ₹20 Lakh turnover (₹10 Lakh for special states), or for any inter-state supply (site in another state), or when serving GST-registered corporate clients.
- TDS applicable: Section 194C at 2% for regular housekeeping contracts. Section 194J at 10% only if classified as professional/technical services (rare).
- Reverse charge (RCM): If you sub-contract cleaning staff from unregistered individuals, you must pay 18% GST under reverse charge and claim it as ITC.
- ITC available: Full ITC on cleaning chemicals, equipment, uniforms, transport, and rent — if registered and charging 18%.
- No exemption for hospitals: Cleaning a hospital or school building does not make your service exempt. The recipient's exemption does not flow to you.
- Invoicing: SAC code 998533 (building cleaning services). Each site and client should have its own monthly invoice.
- Place of supply: The location where the cleaning service is performed — not the client's registered office.
Takeaway: Housekeeping is fully taxable at 18% with no exemptions. The two biggest compliance traps are reverse charge on unregistered sub-contracted staff and the TDS section (194C vs 194J).
1. What is GST for Housekeeping Agencies? (Overview)
GST for housekeeping agencies is the tax framework that applies to every service provided by a cleaning, janitorial, or housekeeping business — office cleaning, residential cleaning, hospital sanitisation, industrial cleaning, deep cleaning, sofa/carpet cleaning, and post-construction cleaning. All of these services fall under the 18% GST slab with full Input Tax Credit eligibility.
Housekeeping agencies operate on two distinct billing models:
All three models attract 18% GST. What varies is the invoicing pattern, TDS deduction, and whether reverse charge applies on sub-contracted staff.
Takeaway: Housekeeping services are always 18% GST. The complexity lies in TDS classification, reverse charge on sub-contracts, and correctly invoicing per-site, per-client.
2. Is GST Applicable to Housekeeping Agencies in India?
Yes — GST applies to housekeeping agencies at 18%. There is no exemption, no concessional rate, and no special scheme for cleaning services. Whether you clean a corporate office, a hospital, a school, or a private residence — GST is 18%.
What Types of Housekeeping Services Are Taxable
| Service Type | GST Rate | ITC |
|---|---|---|
| Office Cleaning (Regular) | 18% | Available |
| Residential Cleaning | 18% | Available |
| Hospital / Clinic Cleaning | 18% | Available |
| School / College Cleaning | 18% | Available |
| Industrial / Factory Cleaning | 18% | Available |
| Deep Cleaning | 18% | Available |
| Sofa / Carpet Cleaning | 18% | Available |
| Post-Construction Cleaning | 18% | Available |
| Kitchen Cleaning (Commercial) | 18% | Available |
| Washroom Sanitisation | 18% | Available |
Why There Is No Exemption
- Not Education/Healthcare: Even if you clean a school or hospital, the exemption belongs to the school/hospital for its own services — it does not flow to your cleaning contract.
- Not Public Service: Cleaning government buildings is a commercial contract — 18% GST applies.
- Not Charitable: Cleaning services are commercial, regardless of who the recipient is.
Takeaway: Every rupee billed for housekeeping services attracts 18% GST. No exceptions — regardless of who your client is or where the cleaning happens.
3. What is the GST Rate for Housekeeping Services?
The GST rate for housekeeping services is 18%. Whether you provide regular office cleaning, deep cleaning, sanitisation, or industrial cleaning — the rate is uniformly 18%.
Detailed Rate Breakdown
| Service | SAC Code | GST Rate |
|---|---|---|
| Building Cleaning Services | 998533 | 18% |
| Industrial Cleaning Services | 998534 | 18% |
| Specialized Cleaning (Deep, Carpet, Sofa) | 998535 | 18% |
| Disinfecting and Pest Control (if bundled) | 998531 | 18% |
| Window / Façade Cleaning | 998535 | 18% |
CGST+SGST vs IGST
- Intra-State Supply: Client site is in the same state as your agency — charge CGST 9% + SGST 9%.
- Inter-State Supply: Client site is in a different state — charge IGST 18%.
- Place of Supply: For housekeeping services, place of supply is generally the location where the cleaning is performed (site address), not the client's registered office.
Takeaway: 18% is the only rate. The CGST vs IGST split depends on where the cleaning is physically performed, not where the client's head office is.
4. Do Housekeeping Agencies Need GST Registration?
Yes — housekeeping agencies need GST registration once annual turnover exceeds ₹20 Lakh (₹10 Lakh for special category states), or if they make inter-state supplies. For most agencies, the inter-state rule triggers registration from Day 1 because corporate clients often have sites in other states.
Registration Requirements by Scenario
| Scenario | GST Registration |
|---|---|
| Only local clients, turnover below ₹20 Lakh | Not required |
| Turnover above ₹20 Lakh (₹10 Lakh special states) | Mandatory |
| Any inter-state supply (site in another state) | Mandatory |
| Supplying to registered corporate clients across states | Mandatory |
| B2B contracts with GSTIN-holding clients | Mandatory |
| Sub-contracting from another registered agency | Mandatory |
| Individual cleaner providing services to offices | Mandatory if turnover above threshold or inter-state |
| Only residential cleaning, local | Not required below ₹20 Lakh |
Documents Required for Registration
- PAN card of the entity (proprietorship / company / partnership / LLP)
- Aadhaar of the authorised signatory
- Business address proof (rent agreement + electricity bill)
- Certificate of incorporation / Partnership deed / Trust deed
- Bank account details (cancelled cheque)
- Photograph of the authorised signatory
- Board resolution / authorisation letter
- Digital Signature Certificate (for online filing)
- MSME / Udyam certificate (optional but recommended)
Composition Scheme — Should You Consider It?
- Composition Scheme: Available if turnover is below ₹1.5 Crore and no inter-state supplies.
- Tax Rate: 1% flat on turnover (0.5% CGST + 0.5% SGST).
- Downside: No ITC allowed. Housekeeping agencies rely heavily on ITC on cleaning supplies, equipment, and uniforms — so composition is often not beneficial.
- Recommendation: Most housekeeping agencies should stay in the regular 18% scheme to claim ITC.
Takeaway: Most housekeeping agencies cross the registration trigger quickly because corporate clients have multi-state sites. Register early and set up compliance from Day 1.
5. Can Housekeeping Agencies Claim Input Tax Credit (ITC)?
Yes — housekeeping agencies charging 18% GST can claim full Input Tax Credit (ITC) on business expenses. Because the output is taxable at 18%, ITC on inputs, input services, and capital goods is fully available. This is a major cash flow lever for agencies.
What ITC Can Be Claimed
ITC on floor cleaners, disinfectants, detergents, sanitisers, mops, brushes, dusters, and consumables.
ITC on vacuum cleaners, scrubber-driers, water tankers, high-pressure washers, and cleaning machines (capital goods).
ITC on uniforms, gloves, masks, safety shoes, and ID cards provided to cleaning staff.
ITC on office rent, storage room rent, electricity, and internet.
ITC on transport vehicles, fuel (with GST invoice), and vehicle maintenance.
ITC on staff training, safety certifications, and skill programs (if GST-registered).
ITC on CA fees, legal fees, and consultant fees (if GST-registered).
ITC on reverse-charged sub-contracted staff — full 18% IGST claimable.
What ITC is Blocked
- Employee Salaries: No ITC on in-house staff salaries (GST not charged on salaries).
- Construction: ITC on office building construction is blocked under Section 17(5).
- Food & Beverages: ITC on staff canteen food is generally blocked.
- Personal Use: Any vehicle or equipment used for personal purposes must be excluded from ITC.
Takeaway: ITC is a major cash flow lever for housekeeping agencies. Track every expense — especially cleaning supplies and RCM on sub-contracts — and claim every rupee.
6. Is TDS Applicable on Housekeeping Agency Payments? (194C vs 194J)
Yes — TDS applies to housekeeping agency payments. The section and rate depend on the nature of the contract: Section 194C at 2% for regular housekeeping contracts, or Section 194J at 10% only when classified as professional/technical services.
194C vs 194J — Which Section Applies?
| Contract Nature | Section | TDS Rate |
|---|---|---|
| Regular Office Housekeeping | 194C | 2% |
| Residential Cleaning Contracts | 194C | 2% |
| Hospital / Industrial Cleaning | 194C | 2% |
| Deep Cleaning / Post-Construction | 194C | 2% |
| Facility Management with Cleaning | 194C | 2% |
| Professional Cleaning Consultancy | 194J | 10% |
Why Most Housekeeping Contracts Are 194C
- Labour Component: Housekeeping is fundamentally manpower-intensive — 194C applies.
- Result-Based Contracts: Standard cleaning contracts with defined deliverables fall under 194C.
- Monthly Billing: Regular monthly invoices for housekeeping services are treated as 194C.
- 194J Applicability: Only when the service is purely professional (cleaning consultancy, hygiene audit) without ongoing manpower deployment.
TDS Threshold and Impact
Takeaway: Most housekeeping contracts fall under 194C at 2%. If a client is deducting 10% under 194J, verify whether the contract is genuinely a professional cleaning consultancy — otherwise, it should be 2%.
7. Does Reverse Charge Apply on Sub-Contracted Housekeeping Staff?
Yes — reverse charge (RCM) applies when a housekeeping agency sub-contracts cleaning staff from unregistered individuals or unregistered agencies. The agency must pay 18% GST on the sub-contract value and can claim the same amount as ITC.
When Reverse Charge Applies
- Sub-Contract to Unregistered Individual: If you hire individual cleaners directly without GST registration, RCM applies.
- Sub-Contract to Unregistered Agency: Small cleaning agencies below the threshold don't charge GST — you must pay under RCM.
- Manpower Supply Service: Under notification 29/2019, manpower supply from an unregistered supplier to a registered recipient triggers RCM.
- Cleaning Services Specifically: Cleaning services from an unregistered person to a registered person (other than an individual) trigger RCM under the manpower supply entry.
How RCM Works for Housekeeping Agencies
When Reverse Charge Does NOT Apply
- Registered Sub-Contractor: If the sub-contracted agency is GST-registered, they charge GST on their invoice — no RCM.
- Individual Recipient: If the recipient is an individual (not a business), RCM doesn't apply.
- Direct Employee: If the cleaner is on your payroll (salary), no RCM applies — salaries are outside GST.
• Issue self-invoice for ₹75,000 + IGST 18% (₹13,500)
• Pay ₹13,500 IGST to government
• Claim ₹13,500 as ITC in GSTR-3B
• Net GST impact: Zero — but reporting is mandatory
Takeaway: RCM on sub-contracted housekeeping staff is one of the most missed compliance items. Set up a self-invoice process for every unregistered sub-contractor.
8. Is There Any GST Exemption for Housekeeping in Hospitals, Schools, or Government Buildings?
No — there is no GST exemption for housekeeping services, regardless of the recipient. Cleaning a hospital, school, or government building is a commercial service and remains taxable at 18%. This is one of the most common misconceptions in the industry.
Why the Exemption Myth Exists
- Hospital Exemption Confusion: Hospitals are exempt from GST on healthcare services — but that exemption applies to the hospital, not to you as their cleaning contractor.
- School Exemption Confusion: Schools have exempt education services — but housekeeping contracts provided to schools are taxable at 18%.
- Government Contracts: Cleaning services for government buildings are still commercial contracts — 18% GST applies.
- The Rule: Exemption is service-specific, not recipient-specific. Your cleaning service is taxable regardless of who buys it.
Correct GST Treatment by Recipient
| Recipient | GST Rate | Notes |
|---|---|---|
| Corporate Office | 18% | Standard taxable service |
| Hospital | 18% | Hospital's healthcare exemption does not flow to you |
| School / College | 18% | Education exemption applies to them, not your service |
| Government Building | 18% | Commercial contract, taxable |
| Residential Society | 18% | Community cleaning contracts are taxable |
| Individual Home | 18% | If provided by registered agency |
Takeaway: Do not assume exemption based on the recipient's sector. Cleaning services are always taxable at 18%, no matter who you clean for.
9. How to Invoice Housekeeping Services Under GST?
A GST-compliant invoice is the foundation of housekeeping agency compliance. Every site and client should have its own monthly invoice with GSTIN and SAC code.
Mandatory Fields on a Housekeeping Invoice
- Agency name, address, and GSTIN
- Client name, address, and GSTIN
- Unique invoice number and date
- Description: "Housekeeping Services — 15 cleaners × 30 days"
- SAC Code: 998533 (building cleaning), 998534 (industrial), or 998535 (specialized)
- Site address (place of supply)
- Taxable value (cleaners × rate)
- GST rate (18%) and amount (CGST+SGST or IGST)
- Place of supply (site location for site-based services)
- Signature of authorised signatory
Monthly vs Project-Based Invoicing
| Service Type | Invoicing |
|---|---|
| Regular Office Housekeeping | One invoice per month per client-site |
| Residential Cleaning | Per visit or monthly consolidated |
| Deep Cleaning | One invoice per project |
| Post-Construction Cleaning | One invoice per site handover |
| Sofa / Carpet Cleaning | Per item or per assignment |
| Industrial Cleaning | Per project or monthly AMC |
• Agency: CleanPro Services Pvt Ltd, Bengaluru (GSTIN: 29XXXXX)
• Client: ABC Corp, Mumbai (GSTIN: 27XXXXX)
• Service: Office Housekeeping — 10 cleaners × 30 days
• Site: Mumbai (place of supply = Maharashtra)
• SAC: 998533
• Taxable Value: ₹2,00,000
• IGST @ 18%: ₹36,000
• Total: ₹2,36,000
Takeaway: Housekeeping invoices must reflect the deployment site, number of cleaners, and correct SAC code. Missing these details breaks the client's ITC claim and can trigger a GST notice.
10. 10 Common GST Mistakes Housekeeping Agencies Make (With Solutions)
Takeaway: The biggest GST risks for housekeeping agencies come from the hospital/school exemption myth, missing RCM on sub-contracts, and wrong TDS classification. Build strong SOPs for all three.