What is a SAC Code and How Is It Different from HSN?
SAC stands for Services Accounting Code — a 6-digit numerical code system used under GST to classify all services into specific categories for the purpose of determining the applicable GST rate. The SAC code system was developed by the Central Board of Indirect Taxes and Customs (CBIC) based on the United Nations' Central Product Classification system. It is the services equivalent of the HSN (Harmonized System of Nomenclature) code used for goods.nnWhile HSN codes are internationally standardised codes used for goods classification in customs and excise globally, SAC codes are specific to India's GST framework for services. Every service taxable under GST has a designated SAC code — from information technology services and legal services to construction, healthcare, education, transportation, and financial services. The SAC code determines the GST rate applicable to the service — entering the wrong SAC code on an invoice means the wrong GST rate is applied, which constitutes either under-payment (creating a tax demand) or over-payment (creating reconciliation complexity for both supplier and customer).nnSAC codes follow a structured hierarchy. The first two digits (99) are common to all services under Indian GST. The next two digits identify the service sector — for example, 9983 is for other professional, technical, and business services, 9972 is for real estate services, 9954 is for construction services. The fifth and sixth digits further classify within the sector. Understanding the hierarchy helps in locating the right code when the exact service description is not immediately obvious.
SAC Codes for IT and Technology Services — 18% GST
Information technology and technology-related services form one of the largest SAC categories. All IT services attract GST at 18% under the standard service rate. The primary SAC codes for IT services fall under the 9983 group (Other Professional, Technical and Business Services).nnKey IT SAC codes include: 998311 for management consulting and management services (IT project management, PMO services), 998312 for business and management consulting services, 998313 for information technology consulting and support services (IT helpdesk, technical support, system administration), 998314 for IT infrastructure services (cloud hosting, data centre services, managed services), 998315 for IT software development services (custom software development, app development, website development), 998316 for support services to technology management (IT maintenance and support contracts), and 998319 for other IT and ITES services.nnFor software products — packaged software sold as a product rather than a service — HSN code 8523 applies at 18% GST, not the SAC codes. The distinction between a software product (HSN 8523) and software service (SAC 9983xx) is important for invoicing — software companies selling perpetual licences of packaged software use HSN, while those providing SaaS subscriptions or custom development use SAC codes. Mixed invoices (product plus service) must split into HSN and SAC line items.
| SAC Code | Service Description | GST Rate |
|---|---|---|
| 998311 | Management consulting and management services | 18% |
| 998313 | IT consulting, support, and operational assistance | 18% |
| 998314 | IT infrastructure provisioning and management | 18% |
| 998315 | Software development and publishing services | 18% |
| 998316 | IT technical support and maintenance services | 18% |
| 998319 | Other IT and computer related services | 18% |
| 998321 | Data processing and management services | 18% |
| 998322 | Data entry, document preparation, editing services | 18% |
| 998331 | Financial auditing and accounting services | 18% |
| 998332 | Bookkeeping and payroll processing services | 18% |
SAC Codes for Legal, Professional and Financial Services
Legal, professional, and financial services all attract 18% GST and are classified under the 9982 (Legal and Accounting) and 9983 (Professional and Business) service groups. Using the correct SAC code is particularly important for professional service providers as their invoices are subject to TDS under Section 194J and GST reconciliation during client GST audits.nnKey SAC codes for legal services: 998211 for legal advisory and representation services in civil, commercial, and criminal proceedings; 998212 for legal documentation and certification services by advocates and notaries; and 998213 for other legal services including legal research and para-legal services. All legal services to registered businesses attract 18% GST with the business client paying under RCM when the service is from an individual advocate.nnFor Chartered Accountants, Company Secretaries, and Cost Accountants: 998221 covers accounting and related services; 998222 covers tax consulting and related services; 998223 covers internal audit services; 998224 covers accounting review and related services; and 998331 covers financial audit services. For management and business consulting: 998311 covers management consulting; 998312 covers business consulting; and 998314 covers operational management services. Financial services including banking and insurance carry separate SAC codes under the 997 group — 997111 for central banking services, 997120 for other banking services, and 997133 for insurance and pension services, with varying GST rates depending on the specific financial service category.
SAC Codes for Construction and Real Estate Services
Construction and real estate services use SAC codes under the 9954 group (Construction Services) and 9972 group (Real Estate Services). The GST rate for construction services varies significantly depending on whether ITC is available and the type of project — residential, commercial, affordable housing, or government projects.nnKey construction SAC codes: 995411 covers residential building construction services (new construction of houses, apartments, villas). 995412 covers multi-dwelling residential building construction. 995421 covers industrial building construction. 995422 covers commercial building construction. 995432 covers construction of roads and highways. 995435 covers construction of water projects and sewage treatment plants. Works contract services — where both goods and services are provided under a single contract — use SAC 9954 as the parent code with sub-codes for specific construction types.nnFor real estate agency services: 997212 covers buying and selling of real estate (brokerage). 997213 covers renting or leasing of residential real estate. 997214 covers renting or leasing of commercial real estate. All real estate brokerage services attract 18% GST. Under-construction residential property services use 995411 at 5% (affordable) or 12% (others) without ITC for the developer. Commercial construction services (995421, 995422) attract 18% with ITC available for the developer.
Exempt Service SAC Codes — Healthcare, Education and Others
Several categories of services are exempt from GST — they carry 0% rate. Despite being exempt, these services still have SAC codes assigned to them, and service providers in these categories may be required to mention the SAC code on their bills or letters of authorization, particularly for regulatory or professional reporting purposes.nnHealthcare services use SAC codes under the 9993 group: 999311 covers in-patient services at hospitals; 999312 covers medical and dental services (outpatient consultations, dental procedures); 999313 covers clinical laboratory services and diagnostic services; 999314 covers paramedical services by nurses, midwives, physiotherapists; and 999315 covers ambulance services. All these healthcare services are exempt from GST at 0% when provided by clinical establishments registered with the clinical establishments regulator.nnEducational services use SAC codes under the 9992 group: 999210 covers pre-primary education; 999220 covers primary education; 999230 covers secondary education (up to class 12); 999240 covers higher education (degree and post-graduation); and 999250 covers specialised education services. All educational services provided by recognised institutions are exempt from GST. However, coaching classes and private tuition services (not degree-granting institutions) are taxable at 18% under SAC 999293 (other education and training).nnFor transport services: passenger transport by air (economy class) is at 5% under SAC 996411; business class air transport is 12% under SAC 996411 with a modifier; metered cab services including Ola and Uber are at 5% under SAC 996412. Rail transport in economy class is exempt; AC rail is at 5% under SAC 996421. Transport of goods by road (GTA services) uses SAC 996511 at 5% under RCM or 12% if GTA opts for forward charge with ITC.
| SAC Code | Service | GST Rate |
|---|---|---|
| 999311 | In-patient health care services | 0% (exempt) |
| 999312 | Medical and dental services (outpatient) | 0% (exempt) |
| 999220 | Primary education services | 0% (exempt) |
| 999230 | Secondary and higher secondary education | 0% (exempt) |
| 999293 | Private coaching and tuition centres | 18% |
| 996411 | Air transport of passengers — economy | 5% |
| 996411 | Air transport of passengers — business class | 12% |
| 996421 | Railway transport — AC classes | 5% |
| 996511 | Road transport of goods — GTA | 5% (RCM) or 12% (forward charge) |
| 997212 | Real estate brokerage and agency services | 18% |
