The most-asked question on therapist-finance forums: do I charge GST on my fees?
The most-confusing answer: it depends — on what you do, who you are, and how the tax authorities classify what you do.
This post tries to be the clearest version of “it depends” that exists. It is not tax advice. Talk to a CA before you act on anything here. But you’ll arrive at that CA conversation better informed.
The two-paragraph version
If you are an RCI-registered clinical psychologist providing clinical services, your services are likely exempt from GST under the healthcare-services exemption (Notification 12/2017, healthcare services entry). You don’t charge GST, you don’t claim ITC.
If you are an unregistered counsellor, life coach, or non-clinical professional, your services are likely taxable under GST and the threshold registration limit applies (₹20 lakhs aggregate turnover in most states, ₹10 lakhs in special category states). Once you cross it, you register, charge GST, and file returns.
Now the long version, because the words “likely” are doing real work in those paragraphs.
What counts as “healthcare services”
The GST notification defines healthcare services as “services by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India”.
Three phrases matter:
“Diagnosis or treatment.” Clinical psychology services (assessment, treatment of mental disorders) fit here. Coaching and skills-development arguably don’t.
“Recognized system of medicines.” Allopathy, AYUSH systems (Ayurveda, Yoga & Naturopathy, Unani, Siddha, Homoeopathy). Clinical psychology is recognised under allopathy as a paramedical/clinical discipline. Counselling psychology and pure counselling are murkier — they’re recognised practices but not always explicitly cited.
“Clinical establishment.” Defined elsewhere as a hospital, nursing home, clinic, etc. providing diagnosis or treatment. A private clinical psychologist’s room can qualify if it’s set up as such.
The grey area is the gap between clinical psychology (likely exempt) and counselling/coaching (likely taxable). Your CA’s job is to apply your specific practice profile to these definitions.
SAC code in practice
If you’re charging GST, the Service Accounting Code that’s most relevant is:
- 9993 — Human health and social care services
- 999316 — Diagnostic and pathology services (less relevant)
- 999319 — Other human health services not elsewhere classified
- 998314 sometimes appears for counselling
The exact code depends on the nature of your service. For most clinical-psych-adjacent work, 9993 or 999319 is the broad bucket. Your tool’s invoice template should let you set the SAC code per service type.
When to register, even if exempt
A counterintuitive point. Even if your services are GST-exempt, you may still need to register under GST if:
- You purchase services from outside India and need to pay GST on reverse charge (e.g., paid international software subscriptions over a threshold)
- You want to claim ITC on inputs (most therapists don’t need to, but if you have significant business inputs, it might matter)
- A government or corporate client demands a GST number on the invoice
The threshold question is whether your aggregate annual turnover exceeds ₹20 lakhs (₹10 lakhs in special category states). Below the threshold, registration is optional. Above it, it’s mandatory unless you’re entirely in exempt categories.
The invoice your software needs to produce
A GST-compliant invoice has specific required fields. Whether you charge GST or are exempt, getting the invoice right matters because corporate clients will ask.
Required fields:
- Practice/business name and address
- GSTIN (if registered)
- Invoice number (sequential, unique)
- Invoice date
- Client name and address (and GSTIN if they’re registered)
- SAC code
- Description of service
- Total amount
- Tax rate and tax amount (or “exempt” with reason)
- Place of supply
- Signature (electronic is fine)
A practice-management tool that doesn’t have most of these fields is not built for India. Ask in your trial.
Common things tools miss:
- HSN/SAC code field that lets you set a default
- Place of supply (the state where the service is rendered or consumed)
- “Reverse charge” indicator (rare but needs to be available)
- Sequential invoice numbering with a custom prefix (FY25-001, etc.)
Reverse charge: a corner you’ll meet
If you subscribe to international software (Notion, Stripe, Figma, a US-based practice-management tool), you’re importing services. Above a threshold, GST on these services is payable on reverse charge — you pay it to the government on behalf of the foreign supplier.
For a small therapy practice, this rarely triggers (the threshold is meaningful). But if you’re paying $69/month to SimplePractice for a year, the annual ~₹70,000 of imported services is below most thresholds but worth knowing about. Your CA can verify.
This is part of why India-based, INR-denominated tools are simpler. You’re not even in the reverse-charge conversation.
The hidden fee in payment processors
Both Razorpay and Stripe charge GST on their processing fees. So a 2% transaction fee is actually 2% + 18% GST on the fee — about 2.36% effective. Small but real.
The corollary: at year-end, you can claim ITC on these processing-fee GST payments if you’re GST-registered. Below the threshold, you eat the cost. Above it, your CA can recover some.
What this means for your practice-management tool
A short list:
- Tool must support a GSTIN field on practice settings.
- Tool must support per-client GSTIN (for B2B-ish clients).
- Tool must support SAC codes per service type.
- Tool must support marking an invoice as “exempt” with a reason.
- Tool must support sequential numbering with a custom prefix.
- Tool must produce a PDF invoice that a CA wouldn’t laugh at.
- Tool must export invoices as CSV for filing.
Most India-built tools handle all of this. Most US-built tools handle 1–2 with effort.
A practical year-end workflow
What I’d recommend for a small practice:
- Monthly: Export all invoices for the month as CSV. Send to your CA.
- Quarterly: Verify your invoice numbering is unbroken (no gaps, no duplicates).
- Annually: Reconcile your bank statements against your invoice register. The difference between bank receipts and invoiced amounts should equal: cancelled invoices + outstanding receivables.
This takes about three hours a year if your tool is well-organised. It takes about three days if it’s a mess.
A frank close
Tax in India is one of those things where the rules look complex but the practice is simpler than the rule book. If you’re an RCI-registered clinical psychologist seeing clients in your room, you’re probably exempt, you produce GST-style invoices marked exempt, and you keep clean records. That’s it. The complexity arrives only when your practice grows past the threshold or you add non-clinical service lines.
For the tool to actually support this: it has to be a tool built for India. Not adapted. Built. We made MindMaster for exactly this reason — invoices that GST-aware CAs accept without raising eyebrows. The trial is at mindmaster.modoware.com.
For the tax itself: talk to a CA. The ₹3,000 you spend on a 30-minute consultation early in your practice saves multiples of that in repair work later.