GST for therapists in India: when counselling is taxed, and what your invoice must show

Last updated 25 October 2026. Every notification, section and ruling quoted below was read in the GST Council's or CBIC's own copy on that date. This is an explainer, not tax advice. GST on counselling is genuinely unsettled, and your own position depends on your qualification, your turnover and your clients; a chartered accountant decides it. Spotted a mistake? Write to hello@unifiedself.in and we will fix it and say so.

On this page

1. The ₹20 lakh threshold, and the traps around it
2. The health-care exemption, word by word
3. The exemption for RCI professionals
4. What the rulings say so far
5. Rate and code if you are taxable
6. The composition scheme, and why online therapists rarely qualify
7. What your invoice or receipt must show
8. Four practices, four answers
9. Questions people ask
10. Sources

The ₹20 lakh threshold, and the traps around it

Section 22 of the Central Goods and Services Tax Act, 2017 makes a supplier liable to register "if his aggregate turnover in a financial year exceeds twenty lakh rupees", and "ten lakh rupees" for supplies from the special category states. A later proviso lets the government raise the limit "to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods"; that ₹40 lakh figure, often quoted to therapists, is for goods only. For services the line is ₹20 lakh.

Four things around that line catch practitioners out.

• "Aggregate turnover" counts everything, including exempt supplies: section 2(6) defines it as "the aggregate value of all taxable supplies … exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number". Fees from teaching, supervision, workshops and writing all add up with session fees.
• Exempt-only suppliers need not register at any turnover. Section 23(1)(a) exempts "any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax". So the exemption question below decides the registration question too.
• Clients in other states. Section 24(i) requires registration, regardless of turnover, for "persons making any inter-State taxable supply", which an online session with a client in another state is. For services the government lifted that burden: Notification 10/2017-Integrated Tax exempts from registration "persons making inter-State supplies of taxable services and having an aggregate turnover … not exceeding an amount of twenty lakh rupees in a financial year". Below ₹20 lakh, online clients across India do not force you to register.
• Selling through a platform. Section 24(ix) requires registration, again regardless of turnover, for persons who supply services "through such electronic commerce operator who is required to collect tax at source under section 52". If a marketplace takes the client's payment and deducts tax at source before paying you, ask it, and your accountant, whether that clause applies to you.

The health-care exemption, word by word

The exemption that doctors and hospitals rely on is entry 74 of Notification 12/2017-Central Tax (Rate):

Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics; (b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above.

Notification 12/2017-Central Tax (Rate), 28 June 2017, Sl. No. 74, heading 9993, rate Nil.

Three terms carry the weight, and the notification defines two of them:

"health care services" means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery …

"clinical establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases;

"authorised medical practitioner" means a medical practitioner registered with any of the councils of the recognised system of medicines established or recognised by law in India and includes a medical professional having the requisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force;

Notification 12/2017-Central Tax (Rate), paragraph 2, clauses (zg), (s) and (k).

Two terms are not defined anywhere in the notification: "para-medics", and the phrase every definition rests on, "recognised system of medicines". For the second, authorities borrow the Clinical Establishments (Registration and Regulation) Act, 2010, whose section 2(h) says it "means Allopathy, Yoga, Naturopathy, Ayurveda, Homoeopathy, Siddha and Unani System of medicines or any other system of medicine as may be recognised by the Central Government". Psychology is not on that list.

Read against a counselling psychologist in private practice, each limb fails or wobbles. You are not a clinical establishment, unless you run a registered clinic. You are not an authorised medical practitioner, because you are not registered with a medical council of a recognised system. That leaves para-medics, which nobody has defined, and the prior question of whether talking therapy is "treatment or care for illness … in any recognised system of medicines" at all. A psychiatrist is squarely inside the exemption; the classification notes even list "consultation services in … psychiatry" under medical services. A psychologist is outside it on the plain words, and no circular has said otherwise. We searched CBIC's circulars and found nothing on psychologists or counsellors.

The exemption for RCI professionals

Psychologists did ask. The agenda of the GST Council's 31st meeting in December 2018 records a "Request to exempt levy of GST on services offered by psychologists and special/ remedial educators and all other rehabilitation professionals as recognized by the Rehabilitation Council of India", and the officials' note that "Most of these professionals are not collecting GST, the revenue implication for the exemption proposal would be minimal". What came out was a narrow entry, inserted by Notification 28/2018-Central Tax (Rate) from 1 January 2019:

Services provided by rehabilitation professionals recognised under the Rehabilitation Council of India Act, 1992 (34 of 1992) by way of rehabilitation, therapy or counselling and such other activity as covered by the said Act at medical establishments, educational institutions, rehabilitation centers established by Central Government, State Government or Union territory or an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961).

Notification 12/2017-Central Tax (Rate), Sl. No. 74A, as inserted by Notification 28/2018; "or 12AB" was added after "12AA" by Notification 07/2021.

Three conditions, all of which must hold: the person is a rehabilitation professional recognised under the RCI Act, which means a clinical or rehabilitation psychologist on RCI's register, not a counselling psychologist; the service is rehabilitation, therapy or counselling; and it is delivered at a government or charitable medical establishment, educational institution or rehabilitation centre. Private practice is not on the list, and the one authority to examine 74A read the establishment condition strictly.

What the rulings say so far

On 25 October 2026 we searched every entry in the GST Council's listing of advance rulings for psychology, counselling, mental health, therapy and rehabilitation. No ruling decides the case of one-to-one counselling or psychotherapy by an individual psychologist or counsellor. Three come close enough to show how authorities read the words.

• Radiantminds Rehab LLP, Kerala, 19 May 2025. A private centre employing RCI-recognised occupational therapists, speech therapists and psychologists asked whether its services were exempt under 74A. The authority held it was "not eligible for exemption on this separate and independent ground that it is not registered as a clinical or medical establishment as per the regulatory framework governing healthcare service providers in Kerala", then classified "therapy, counselling, and other rehabilitation related services by professionals like occupational therapists, speech therapists, and psychologist" under "Service Accounting Code (SAC) 999319, which covers 'Other human health services'", and ruled: "GST shall be levied at the rate of 18% under SAC 999319". It also confirmed that such a supplier must register once turnover crosses the threshold.
• Snehador Social & Health Care Support LLP, West Bengal, 22 December 2023. A home-care service for the elderly. The authority found that "the applicant doesn't fall under any of the aforesaid categories of suppliers and the services provided by the applicant, therefore, fail to qualify as exempted service", and taxed them at 18%. The lesson is that who supplies matters as much as what is supplied.
• Sanjeevani Psychiatric Clinic, Rajasthan, 25 April 2023. A clinic registered under the Clinical Establishments Act and run by an MBBS, MD psychiatrist asked whether outpatient treatment of substance use disorder was exempt. The authority held that "substance use disorder is out of ambit of health care services and supply of services by treatment of patients suffering from SUD as out-patient don't fall under the definition of health care services so not exempt under entry 74(a)". We cite it not because it is obviously right, but because it shows how narrowly one authority was prepared to read the exemption even for a registered allopathic clinic.

Advance rulings bind only the applicant and the officer concerned, and other authorities read the same words differently; a charitable foundation's mental-health programme was held exempt in Gujarat in June 2026 under the separate entry for charitable activities. But a counselling psychologist in private practice above the threshold should assume, until a court or the Council says otherwise, that the tax authority's starting position is 18%.

Rate and code if you are taxable

Human health services fall under heading 9993, taxed at 9% central tax plus 9% state tax, 18% in all, by Sl. No. 31 of Notification 11/2017-Central Tax (Rate). The classification scheme's code 999319 is "Other human health services including homeopathy, unani, ayurveda, naturopathy, acupuncture and the like", and the explanatory notes describe it as "Other paramedical human health services not elsewhere classified, such as acupuncture, aroma therapy, speech therapy, homeopathy, nutrition therapy etc. Note: These services are provided by qualified practitioners, other than medical doctors." That is the code the Kerala authority applied to psychologists. The alternative some accountants use, 998399 for other professional services, is also 18%, so the rate does not change with the argument; the code is worth getting right on the invoice because it signals which exemption analysis you have accepted.

The composition scheme, and why online therapists rarely qualify

Section 10(2A) lets a registered service provider "whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees" pay tax at a flat rate "not exceeding three per cent." of turnover under the central Act, with the state levy alongside, instead of 18%. The catch is in the conditions: the person must not be "engaged in making any inter-State outward supplies of goods or services", nor supplying through a tax-collecting e-commerce operator; and a composition taxpayer "shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax". A therapist who sees even one online client in another state is making an inter-state supply and is out. For a purely local in-person practice it can be worth asking your accountant about.

What your invoice or receipt must show

There are three different documents, and which one you issue depends on your status.

• Not registered. You issue a receipt, and it must not mention GST or show a GSTIN. Charging GST without registration is an offence; so is quoting a GST-inclusive price when you are not registered.
• Registered and taxable. You issue a tax invoice. The invoice rules require, in summary: your name, address and GSTIN; a consecutive serial number and the date; the client's name and address, and their GSTIN if they are registered; the service code and a description; the value; the rate and amount of central and state tax, or integrated tax for a client in another state, shown separately; the place of supply for inter-state invoices; and your signature or digital signature. Rule 46 of the CGST Rules holds the full list; your accountant will set up the format once.
• Registered but exempt. If you and your accountant conclude your services are exempt and you are registered for another reason, the document is a bill of supply, without tax.

Clients rarely need any of this. What a client's employer or insurer asks for is a receipt that proves a session happened and was paid: your name and qualification, your registration number where one exists, the client's name, the date and duration, the fee, the mode of payment, and a receipt number. No diagnosis belongs on it. A corporate client who wants to claim input credit will ask for a tax invoice with their GSTIN; if you are not registered you cannot give them one, and that is a legitimate answer.

UnifiedSelf issues the receipt and, for registered therapists, the GST invoice with the UPI code on it, numbered in sequence and stored with the payment. That is the one place this guide mentions the product.

Four practices, four answers

Questions people ask

Sources

Everything quoted on this page was read at its source on 25 October 2026. The GST Council and CBIC host the official copies; links change, so document names are given as well.

1. Notification 12/2017-Central Tax (Rate), 28 June 2017: Sl. No. 74 and paragraph 2 definitions (k), (s) and (zg). gstcouncil.gov.in.
2. Notification 28/2018-Central Tax (Rate), 31 December 2018, inserting Sl. No. 74A; Notification 07/2021-Central Tax (Rate), 30 September 2021, adding "or 12AB". GST Council notifications pages.
3. GST Council, 31st meeting, Detailed Agenda Note, Volume 2, item on services of psychologists and rehabilitation professionals. gstcouncil.gov.in.
4. Central Goods and Services Tax Act, 2017: sections 2(6), 10(2A) and 10(4), 22, 23(1)(a) and 24(i) and (ix), as consolidated on CBIC's tax information portal. taxinformation.cbic.gov.in.
5. Notification 10/2017-Integrated Tax, 13 October 2017, exempting inter-state service suppliers under ₹20 lakh from registration.
6. Notification 11/2017-Central Tax (Rate), Sl. No. 31, heading 9993 at 9%; Annexure, Scheme of Classification of Services, codes 999312, 999319 and 998399; CBIC Explanatory Notes to the Scheme of Classification of Services. gstcouncil.gov.in.
7. Radiantminds Rehab LLP, Kerala Authority for Advance Ruling, KER/14/2025, 19 May 2025. gstcouncil.gov.in.
8. Snehador Social & Health Care Support LLP, West Bengal Authority for Advance Ruling, 18/WBAAR/2022-23, 22 December 2023. gstcouncil.gov.in.
9. Sanjeevani Psychiatric Clinic, Rajasthan Authority for Advance Ruling, RAJ/AAR/2023-24/01, 25 April 2023. gstcouncil.gov.in.
10. Sanskar Foundation, Gujarat Authority for Advance Ruling, 24 June 2026, on charitable mental-health activities. gstcouncil.gov.in.
11. Clinical Establishments (Registration and Regulation) Act, 2010, section 2(h).
12. CBIC Circular 32/06/2018-GST, 12 February 2018, on health care services. gstcouncil.gov.in.