GST on brokerage and commission: the 18% rate, the commission SAC code, the invoice and who pays

GST on real-estate brokerage is 18%: 9% CGST plus 9% SGST when the channel partner and the property are in the same state, or 18% IGST when they are not. The commission SAC code for brokerage on flats, houses and other buildings is 997222, "building sales on a fee/commission basis or contract basis". For plots and land it is 997223. At four digits, both sit under heading 9972, real estate services.

A CP registered for GST charges the tax on its own invoice to the builder. Brokerage is not on the reverse-charge list, so the builder does not pay it in the CP's place.

GST on brokerage at a glance

The commission SAC code, and why invoices say "HSN"

GST classifies services under a scheme adapted from the United Nations Central Product Classification. Real-estate services are heading 9972. Inside it, group 99722 is "real estate services on a fee/commission basis or contract basis": the work of a broker or CP, as opposed to a builder selling flats it owns.

The explanatory notes to the scheme say 997222 covers real estate agency and brokerage services related to buildings, and "similar intermediation services involving buying, selling and renting of buildings and associated land". Rental brokerage on a flat or a shop goes under the same code.

Not every commission is real-estate brokerage. For other kinds of commission, these are the nearest entries in the scheme:

People search for a "commission HSN code" or "brokerage HSN code" because rule 46 of the CGST Rules calls the field on a tax invoice the HSN code "for goods or services". For a service, what goes in that field is the service code above, commonly called the SAC.

How many digits: under Notification 78/2020-Central Tax, a business whose aggregate turnover in the previous financial year was up to ₹5 crore must show at least four digits (9972) on invoices to registered buyers. Above ₹5 crore, it must show six (997222). Below ₹5 crore, 9972 meets the rule; 997222 tells the builder's accounts team more.

Commission GST rate: 18%

The rate comes from serial 16 of Notification 11/2017-Central Tax (Rate), the master list of GST rates on services. Item (iii) reads "Real estate services other than (i) and (ii) above", at 9% central tax. Items (i) and (ii) deal with leases of land, so brokerage falls in (iii). A matching 9% state tax (SGST, or UTGST in some union territories) applies alongside. For inter-state supplies, the integrated-tax version of the same entry is 18% IGST (Notification 8/2017-Integrated Tax (Rate)).

The September 2025 changes to GST rates on services (Notification 15/2025-Central Tax (Rate), effective 22/09/2025) did not touch serial 16, and neither did the January 2025 amendment (Notification 05/2025-Central Tax (Rate)). We found no later amendment to this entry as of 16/10/2026.

Who charges GST on brokerage, and when a CP must register

The CP does. Brokerage is supplied under forward charge: the CP adds GST to its invoice, collects it from the builder along with the commission, and pays it to the government.

A CP needs GST registration once its aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh if it supplies from one of the special category states defined in section 22 of the CGST Act.

Working across a state line does not, by itself, force a small CP to register. Notification 10/2017-Integrated Tax exempts persons making inter-state supplies of taxable services from registration while their aggregate turnover, computed on an all-India basis, stays within ₹20 lakh (₹10 lakh for special category states other than Jammu and Kashmir).

An unregistered CP must not add GST to its bill. Section 32(1) of the CGST Act bars a person who is not registered from collecting any amount by way of tax.

Is there reverse charge on brokerage?

No. Notification 13/2017-Central Tax (Rate), as amended, lists the services on which the recipient pays GST instead of the supplier: goods transport agencies, advocates, arbitral tribunals, company directors, insurance agents, recovery agents and a few others. Real-estate brokerage is not on that list.

There is one reverse charge a builder should know about, and it can touch CP payouts indirectly. A builder selling residential flats at the concessional GST rates in force since 01/04/2019 must buy at least 80% of its inputs and input services, by value, from registered suppliers. Development rights, long-term leases of land, FSI, electricity, high-speed diesel, motor spirit and natural gas are left out of that count. On any shortfall, the builder pays GST at 18% itself under reverse charge (Notification 07/2019-Central Tax (Rate), read with Notification 11/2017-Central Tax (Rate)).

Whether brokerage paid to unregistered CPs counts as an input service in your project's 80% test is a question for your CA. If it does, a large unregistered CP network can surface as a tax bill once the year's purchases are totalled.

Place of supply: where the property is

For services "directly in relation to an immovable property", section 12(3)(a) of the IGST Act sets the place of supply at the location of the property, and it names "estate agents" in that list. So the question is not where the builder's office is, but where the flat is.

Compare that state with the state the CP is registered in:

Rule 46 also asks for the place of supply, with the name of the state, on every inter-state invoice.

What a CP's GST invoice must show

Rule 46 of the CGST Rules lists what a tax invoice must carry. For a brokerage invoice to a builder, that means:

• your name, address and GSTIN;
• a consecutive invoice number of up to 16 characters, unique for the financial year, and the date;
• the builder's name, address and GSTIN;
• the service code, 9972 or 997222, and a description that ties the fee to the deal (for example, "Brokerage: Flat B-1204, Tower B, booked 20/11/2026");
• the taxable value (the commission) and the total value;
• the rate and amount of each tax: CGST and SGST, or IGST;
• the place of supply with the state's name, for an inter-state invoice;
• whether tax is payable on reverse charge (for brokerage, no);
• your signature or digital signature.

Two additions depend on your size and your client. If your aggregate turnover in any financial year since 2017-18 has crossed ₹5 crore, the e-invoicing threshold since 01/08/2023 (Notification 10/2023-Central Tax), invoices to registered businesses must be e-invoices carrying the IRN and QR code. If you bill someone who is not registered, say a resale buyer paying your fee, the invoice must carry their name, address and state when the taxable value is ₹50,000 or more.

TDS and GST on one payout

From 01/04/2026, the builder deducts TDS on commission under section 393(1) of the Income-tax Act, 2025, the successor to section 194H: 2%, once the CP's total for the tax year crosses ₹20,000.

That 2% is worked out on the commission, not on commission plus GST. CBDT Circular No. 23/2017 says that where the agreement or contract shows the "GST on services" component separately, tax is deducted on the amount "without including such 'GST on services' component". Section 536(2)(j) of the 2025 Act keeps old-Act circulars in force where they are consistent with the new Act.

The two taxes do not offset each other. TDS is the CP's own income tax, collected in advance. GST is a tax the CP collects for the government. The CP still pays the full GST on its invoice, even though the builder paid it the TDS amount less.

Worked example: one ₹1 crore flat, two CPs

Can the builder claim the GST back?

Sometimes. Under section 16(2) of the CGST Act, a recipient can take input tax credit only if, among other conditions, it holds the tax invoice, the supplier has furnished the invoice in its statement of outward supplies so that it is communicated to the recipient, and the tax has actually been paid to the government. A CP that files late, or leaves an invoice out, holds up the builder's credit.

A builder on the concessional residential rates in force since 01/04/2019 generally cannot take this credit: those rates apply on the condition that input tax credit is not taken, except to the limited extent the notification's annexures allow. For those builders, the 18% on every CP invoice is a cost of sale, and it belongs in the project budget.

Common mistakes on brokerage invoices

1. Charging GST without a GSTIN. An unregistered CP cannot collect GST (section 32(1) of the CGST Act).
2. CGST and SGST on an inter-state invoice. A Delhi CP billing for a Noida flat charges IGST, because the place of supply is the property's state.
3. A vague description. "Professional charges" with no project or unit invites questions from the builder's accounts team. Tie each invoice to a deal.
4. TDS on the GST. When GST is shown separately, the builder deducts 2% on the commission only.
5. The wrong service code. Real-estate brokerage is 9972 or 997222 (997223 for land), not whatever "commission" code a search result suggests.
6. Missing the e-invoice threshold. Once your aggregate turnover crosses ₹5 crore, invoices to registered businesses must be e-invoices with an IRN.

Where Saudaflow fits

Saudaflow is a CRM for Indian builders and channel partners. It does not raise brokerage invoices: the builder's commission ledger works out each tranche's base, 18% GST where the partner is GST-registered, and the TDS, and the partner raises the invoice from those figures, showing the GST as CGST plus SGST or as IGST. The brokerage and commission tracking page describes that ledger, and the CRM for channel partners page what a partner sees of it where the builder runs Saudaflow.

For builders, the channel partner module shows each commission as Accrued, Scheduled or Paid, and notes that TDS and GST tracking needs the correct partner, project and tax settings, reviewed with your finance team. If a term in this post is new to you, the Indian real estate glossary has plain definitions.

Checked against the Explanatory Notes to the Scheme of Classification of Services; Notifications 11/2017, 13/2017, 07/2019, 09/2024, 05/2025, 07/2025 and 15/2025-Central Tax (Rate); the Annexure to Notification 11/2017-Central Tax (Rate); Notification 8/2017-Integrated Tax (Rate); Notification 10/2017-Integrated Tax; Notifications 78/2020 and 10/2023-Central Tax; sections 16, 22 and 32 of the CGST Act; section 12 of the IGST Act; rule 46 of the CGST Rules; section 393 of the Income-tax Act, 2025; and CBDT Circular No. 23/2017, on 16/10/2026. General information, not tax advice; ask your CA for your case.