Almost every interior project you take on is secretly two businesses stitched together, and GST treats them very differently. There is the design work you sell, your time, your drawings, your judgement on where the TV wall lands, and then there is the furniture, the modular units, the tiles and lighting you supply or arrange, and those are goods. One is a service, the other is a product, and when you put them both on a single invoice without thinking about it, that's exactly where studios trip at filing time. Let me walk you through the difference in plain language, because once you see the two supplies clearly, the whole thing gets a lot calmer.
The two supplies hiding inside one project
Picture a normal 2BHK job. You charge a design fee, say for the concept, the drawings and the site supervision, and then you also supply a wardrobe, a bed, a sofa and the false-ceiling material through your vendors. In GST language you have made two kinds of supply from one project: a supply of service (the design) and a supply of goods (the furniture and materials). They ride together in the client's head as "the interior cost", but the tax law keeps them apart, and it wants you to keep them apart too.
The reason this matters is that the code and often the rate attached to each is not the same. Design carries a services code and a settled rate. A wooden wardrobe carries a goods code and whatever rate currently applies to that class of furniture. If you smear one flat percentage across the whole bill, either you have overcharged the client or you have short-paid the government, and both come back to bite you when the return is scrutinised.
The design service side: a clean SAC and a settled rate
Design is a service, so it does not use an HSN code, it uses a SAC, which is just the Services Accounting Code. For interior design and decoration work the code most studios sit under is 9954 at the broad level, and 995443 at the specific level for interior decoration and design services. Architectural work sits under 9983. The rate on this design service is 18%, and that part has been stable and predictable for years, so you can quote it with confidence.
The nice thing about the service line is that it is the one you fully control. It is your fee, your value, and it does not depend on some vendor's product category. If most of your revenue came from the design fee rather than the goods, your GST life would be genuinely simple. The complication only enters when you start supplying the physical stuff, which of course most Indian studios do because clients want a single point of contact.
The furniture and goods side: HSN codes and their own rates
The moment you supply goods, you inherit the goods world. Every physical item, the sofa, the wardrobe, the tiles, the lights, the modular kitchen shutters, carries its own HSN code and its own GST rate, and those rates are not all identical the way the service rate is. Some categories of furniture and finishes sit at one slab, others at another, and the government does revise these, so the honest move is to confirm the current rate for each item rather than trust a number you memorised two years ago. A quick way to check what code a product falls under is an HSN and SAC code lookup, and the authoritative source for rate notifications is the CBIC-GST site.
Here is the practical trap. When you buy that wardrobe from your carpenter or vendor, you pay GST on it as an input, and when you supply it onward to your client, you charge GST on it as an output. If you are registered and doing this cleanly, the tax you paid on the purchase becomes input tax credit against the tax you collect, which is a whole topic in itself and one I get into in how input tax credit works on studio expenses. But you can only claim that credit if the purchase and the sale are both recorded properly, which again means the goods line has to be a real goods line with the right code, not something bundled into a vague "interior charges" total.
Where studios actually get it wrong
Nine times out of ten the mistake is the same: one line on the invoice that just says "Interior work" for the full amount, taxed at a single rate the studio guessed. It feels efficient. It is a landmine. Here is why.
- If you tax the whole thing at 18% but a big chunk of it was furniture at a different rate, your numbers will not reconcile against what your vendors billed you, and your input credit picture goes wobbly.
- If the client is a GST-registered company, their accountant needs the split to claim their own credit correctly, and a single mystery line gets bounced back to you, which stalls your payment.
- At filing time, your outward supplies in GSTR-1 and the summary you pay in GSTR-3B are built from these invoices, so a muddled invoice means a muddled return.
The fix is boring and effective: split the invoice so the design service sits on its own SAC line and each supplied item sits on its own HSN line at its own rate. It looks like more work up front and it saves you from every downstream mess.
A worked example you can copy
Say you close a project with a ₹3 lakh design fee and ₹9 lakh of supplied furniture and finishes. Here is roughly how the split reads on a clean invoice, assuming an intra-state supply where the tax divides into CGST and SGST.
| Line | Code type | Taxable value | How it's taxed |
|---|---|---|---|
| Interior design fee | SAC 995443 | ₹3,00,000 | 18%, split as CGST + SGST |
| Modular wardrobe supply | HSN (furniture) | ₹4,00,000 | at the furniture rate, as its own line |
| Loose furniture (sofa, bed) | HSN (furniture) | ₹3,00,000 | at the applicable rate, as its own line |
| Lighting and fixtures | HSN (lighting) | ₹2,00,000 | at the applicable rate, as its own line |
Notice that the design fee is the only line you can rate with your eyes closed. Everything else you confirm against the current notification for that product class. That habit, confirm the goods rate, never guess it, is what keeps you clean.
When it becomes a works contract instead
There is a third path worth naming. If you are not really selling "design plus separately itemised furniture" but instead doing a turnkey fit-out where design and execution are fused into one lumpsum against immovable property, that can qualify as a works contract, which GST treats as a service in its own right rather than as goods-plus-service. The treatment there genuinely depends on how your contract is written, so this is the one spot where I would tell you to confirm with your CA rather than self-diagnose. I have written the fuller version in GST on turnkey interiors and works contracts, and it pairs closely with understanding composite versus mixed supply, because those concepts decide whether your bundle takes one rate or many.
Before you send an interior invoice
- Separate the design fee onto its own SAC 995443 line at 18%
- Put each supplied item on its own HSN line at its confirmed current rate
- Decide intra-state (CGST + SGST) versus inter-state (IGST) from place of supply
- Add the client's GSTIN if they are registered, so they can claim credit
- Keep the invoice number in one continuous series for the year
Let the system carry the codes so you don't
Honestly, the reason studios muddle furniture and design into one line is not laziness, it is that doing the split by hand in Excel at 11pm is genuinely annoying, and I understand the temptation completely. That is the exact reason we built Designa the way we did, and it is also why I keep telling people that a spreadsheet is not really free once you count the errors it causes, which I laid out in why Excel quietly costs you margin. In Designa you build the project room by room, each supplied item already carries its code and rate as you spec it, the design fee sits on its own service line, and when the client approves the quote it turns into a compliant GST invoice with the split already correct, no mental math per bill. Studios come to us mostly to stop this one category of mistake, and the pricing stays out of the way: one flat founding price for the whole studio, billed in rupees, with unlimited free client logins, so nobody is rationing access while they clean up their tax lines. If you ever need to reconcile the goods side against your books, the income tax portal and your GST filings should tell the same story, and clean invoices are what make that possible.
Frequently asked questions
Is interior design a good or a service under GST?
The design work is a service under SAC 9954 (995443 for interior design specifically) taxed at 18%. Any furniture or material you supply alongside it is goods with its own HSN code and rate, so a typical project is genuinely both.
Can I put furniture and design fee on one line at one rate?
You can, but you shouldn't. The design service and the goods often carry different rates, and a single mystery line breaks your client's credit claim and your own return reconciliation. Split them line by line.
What GST rate applies to furniture I supply to a client?
Furniture carries a goods rate tied to its HSN code, and these rates get revised, so confirm the current rate for each item rather than assuming. The design fee, by contrast, stays at 18%.
What if my project is a full turnkey fit-out?
A fused turnkey job against immovable property can be a works contract, treated as a service, rather than design-plus-itemised-goods. The treatment depends on your contract, so confirm that specific case with your CA.
Get the two supplies clear in your head and the rest follows: design on its SAC line, goods on their HSN lines, the right intra-state or inter-state split, and a system that carries the codes so you are not re-deciding them every month. If you want to see how that split looks when it's automatic, poke around a real studio setup at demo.designa.work, and when you're ready to stop building invoices by hand, the founding offer is at go.designa.work.