How to price a SaaS in India: GST, gateway fees and the margin you actually keep

Most first-time founders in India pick a price by looking at competitors and rounding to a number that ends in 9. Then the first payout arrives and it's noticeably smaller than expected. The gap isn't a mistake by the payment gateway; it's GST, fees and costs that were never written down.

This guide walks through one realistic example line by line, then covers the decisions that change the result the most. Every number here can be reproduced — and changed — in the free SaaS Pricing Calculator.

A worked example: ₹999 a month, GST included

Assume a GST-registered founder sells a ₹999 monthly plan to customers in India, with GST included in the price (the way most consumer apps show prices). Assume the gateway charges 2% on the transaction plus 18% GST on that fee, about 2% of revenue is refunded, and each customer costs ₹60 a month in AI usage, hosting, email and support time.

1. Customer pays: ₹999.00
2. GST inside that price (18%): ₹999 − ₹999 ÷ 1.18 = ₹152.39. This was never your money; it goes to the government.
3. Gateway fee: 2% of ₹999 = ₹19.98, plus 18% GST on the fee = ₹23.58 in total. The fee is charged on the full amount the customer paid, including GST.
4. Refunds at 2% of the ₹846.61 you keep after GST: ₹16.93.
5. Per-customer costs: ₹60.00.
6. What you keep: about ₹746 — roughly 88% of the ₹846.61 that is actually revenue, but only about 75% of the price on the website.

That ₹746 is the contribution: what each customer leaves behind to pay for everything else — your tools, marketing, salaries and, eventually, profit. If your fixed costs are ₹25,000 a month, you need 34 paying customers just to break even. Every price decision should start from this number, not from the sticker price.

Decision 1: show prices with or without GST?

For individual buyers, a price that includes GST usually feels more honest: the total at checkout matches the price on the page. The cost is that GST comes out of your ₹999.

For businesses, “₹999 + GST” is normal. A GST-registered business can usually claim the GST as input tax credit, so to them the real price is ₹999 either way — and you keep more.

If you sell to both, consider separate plans or clearly labelled business pricing rather than one compromise number.

Decision 2: when do you need GST registration?

Service businesses generally must register once aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in some special-category states). Export income counts towards that total. Below the threshold, registration is optional.

If you're not registered, you don't add GST — but you also can't claim credit on the GST you pay for tools and services. At ₹999 a month, you'd cross ₹20 lakh a year at around 167 customers. Plan the switch before you get there, because your pricing page and invoices will need to change.

Decision 3: international customers

Selling software to a customer outside India can qualify as an export of services. Broadly, that needs the customer to be outside India, the place of supply to be outside India, and payment in convertible foreign exchange. Qualifying exports are zero-rated, and registered businesses usually file a Letter of Undertaking (LUT) on the GST portal so they can export without paying IGST upfront.

International card payments usually carry a higher gateway fee than domestic ones. If a fifth of your customers pay from abroad, enter that in the calculator — the blended fee and the GST both change.

Decision 4: AI costs are now a cost of goods

If your product calls a language model, every active customer has a real marginal cost that grows with usage. A few heavy users can wipe out the margin from many light ones. Three habits help:

• Measure cost per active customer each month from your provider's usage dashboard, not from a guess.
• Put a fair-use limit in the plan (for example, a monthly number of AI runs) and say clearly what happens when someone reaches it.
• Keep a global spending cap in code so a bug or abuse can't create an unlimited bill.

Monthly or yearly?

Annual and quarterly plans bring cash forward and reduce how often a customer has to decide to stay. They also reduce the number of transactions, though the gateway still takes a percentage of each one. If you discount annual plans, model the discounted price as its own scenario: a 20% discount is a 20% smaller contribution per month.

A simple pricing routine

1. Write down your fixed monthly costs and a modest profit target.
2. Measure, or honestly estimate, cost per customer, including AI.
3. Run the numbers at your intended price, then at −20% and +20%.
4. Choose the lowest price at which the number of customers you need is one you can believe you'll reach in the next six months.
5. Re-check every quarter: gateway pricing, tax rules and your own costs all change.

What this guide doesn't cover

It doesn't cover income tax, chargebacks, payout timing, foreign-currency conversion costs or the treatment of specific digital services such as online information and database access services (OIDAR) supplied to overseas consumers. Tax depends on your facts: use this to plan, and confirm with a chartered accountant before you change invoices.