SAC Codes for Services — GST Rate Finder for All Service Categories 2025

SAC Codes for Services — GST Rate Finder for All Service Categories 2025

A SAC (Services Accounting Code) is the six-digit classification number CBIC uses to assign a GST rate and reporting requirement to every service transaction in India. SAC codes do for services exactly what HSN codes do for goods: they determine the tax rate, the invoice mandatory field, and the GSTR-1 table into which your supply flows. The correct SAC is the difference between charging 5% and 18% on the same invoice — and that gap, spread across a year of contracts, can generate a demand with interest and penalty that runs into lakhs. This guide gives you the code structure, the rate logic, a step-by-step lookup method, a worked Rs. example, and the most common mistakes to avoid before you issue your next service invoice.

What a SAC Code Is — and Why Getting It Wrong Costs Real Money

SAC stands for Services Accounting Code. CBIC adapted it from the UN Central Product Classification (CPC) system and issued it as a master list under the GST framework. Every service transaction must carry a SAC on a GST invoice once you cross the mandatory threshold.

Getting the SAC wrong is not a technical footnote — it generates real liability.

A wrong SAC has three direct consequences:

1. Rate mismatch: If you charge 12% when the correct rate is 18%, you have a Rs. 6 shortfall on every Rs. 100 of taxable value. Over a year-long contract, that shortfall compounds with interest from the original tax period.
2. GSTR-1 vs. GSTR-3B mismatch: CBIC's data-matching tools flag SAC-wise discrepancies. A mismatch between what you reported and what you should have charged triggers a scrutiny notice under Section 61 or a demand under Section 73 or 74 of the CGST Act 2017.
3. ITC exposure for your customer: Your B2B customer claims ITC based on your invoice rate. If your SAC and rate are incorrect, their ITC claim is exposed in any scrutiny of their returns.

The Six-Digit Architecture of an SAC Code

Every SAC follows a strict three-tier hierarchy. Understanding the structure lets you navigate CBIC's master list systematically rather than scrolling through hundreds of entries blindly.

SAC 995411 therefore reads: Services heading (99) + Construction group (54) + New residential construction (11).

You will see four-digit codes such as 9954 referenced in rate notifications — those entries cover an entire major group and set the rate ceiling. But the code you must place on your invoice and in GSTR-1 Table 12, once your turnover exceeds Rs. 5 crore, is the six-digit code. The four-digit code in the notification is the legislative anchor; the six-digit code is the operational tool.

The 20 Most-Used SAC Headings for Indian Service Providers

Below is a working reference for the major SAC ranges and their typical GST rates. Use the CBIC SAC master on unknown node to drill down to the six-digit level for your specific service.

Always verify against the current rate notification. Individual six-digit sub-codes within a heading can carry a rate different from the heading default shown above.

GST Rates on Services: Where Most Businesses Sit in FY 2026-27

The backbone rate notification for services is Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, amended through GST Council-driven notifications issued up to and including FY 2026-27.

The Standard 18% World

Most B2B services — IT consulting, management consulting, accounting, advertising, security, maintenance, telecom and financial services — attract 18% GST under the residual entries for SAC headings 9982, 9983, 9984 and 9985. If you provide a professional or technical service and are genuinely unsure of the rate, 18% is almost certainly where you sit. Verify it, but that is the default.

The Exceptions You Must Know

5% without ITC — restaurant services (SAC 996331): Restaurants not located in a hotel where any room tariff exceeds Rs. 7,500 per night charge 5% GST but cannot claim ITC on inputs, capital goods or input services. If the restaurant is inside a qualifying hotel, the rate is 18% — a 13-percentage-point jump that catches hotel F&B operations regularly.

5% or 12% for GTA (SAC 996511): A Goods Transport Agency operating under forward charge can opt for 5% (no ITC) or 12% (with ITC). Under RCM, the registered recipient pays GST at 5% and can claim ITC. The SAC on the GTA's consignment note is the trigger that tells a B2B recipient whether RCM liability has arisen.

Nil for exempt services: Health services (SAC 9993) and most approved educational services (SAC 9992) are exempt under Notification No. 12/2017-CT(Rate). Charging GST on an exempt supply creates a false ITC credit in your customer's books — one that will be reversed with interest when it surfaces.

Varied rates under SAC 9954: Construction services have the most fragmented rate structure in all of GST. These are covered in detail in the next section.

SAC 9954 — Construction and Works Contract: The Most Litigated Service Category

SAC 9954 is where the majority of GST disputes in the services space originate. The same six-digit code can carry rates from 1% to 18%, and the applicable rate depends on three intersecting facts: the type of building, whether supply qualifies as an under-construction unit, and who the counterparty is.

The Rate Map Under SAC 9954

The 12% rate for government infrastructure works contracts is frequently misapplied to large private infrastructure projects. The reduced rate is conditioned on the recipient falling within the defined categories — a PSU or central public sector enterprise does not automatically qualify as a "Government Entity" unless it satisfies the specific definition under GST law. Multiple Advance Rulings and Appellate Authority for Advance Rulings decisions have been issued on this precise question.

How to Find the Right SAC Code in Five Steps

You do not need a paid subscription. CBIC's own tools are sufficient for most classifications.

1. Open the CBIC GST portal at cbic-gst.gov.in. Navigate to GST → Services → SAC Rates search, or download the SAC master list (PDF/Excel) to maintain an offline reference for bulk mapping in your ERP.

1. Start with the broad two-digit group. Ask yourself: is this construction, transport, accommodation, finance, professional services, health, or education? That single question gets you to the correct major group before you read a single six-digit entry.

1. Read the explanatory notes and exclusions at the four-digit heading level. These exclusion notes prevent the most common misclassification errors. For instance, the notes under SAC 9983 (professional and technical services) explicitly exclude services covered by 9982 (legal and accounting) and 9984 (telecom). If your service is excluded from 9983, you must identify the correct heading rather than applying 9983 by default.

1. Cross-reference the rate notification entry — not just the SAC description. The SAC master and the rate notification are separate documents. The SAC tells you what the service is; Notification 11/2017-CT(Rate) and its amendments tell you the applicable rate and conditions. One six-digit SAC can appear in multiple notification entries at different rates (as with SAC 995411 for residential construction). Read every entry that references your code and identify the one whose conditions match your actual supply.

1. Apply for an Advance Ruling under Section 97 of the CGST Act when the classification is genuinely uncertain. A ruling from your State AAR gives prospective protection from the date of the application. It is not retrospective — apply at the start of a new engagement, not after 18 months of billing.

SAC on Your Invoice and in GSTR-1 — The Compliance Mechanics

Invoice-Level Requirements Under Rule 46, CGST Rules

The SAC requirement on a GST invoice is turnover-driven, as notified under Notification No. 78/2020-Central Tax dated 15.10.2020, effective from 01.04.2021:

• Annual aggregate turnover in the preceding FY exceeds Rs. 5 crore: Six-digit SAC mandatory on every B2B and B2C invoice.
• Annual aggregate turnover in the preceding FY is Rs. 5 crore or below: Four-digit SAC required on B2B invoices. B2C invoices are exempt from the SAC field requirement.

Smaller service firms frequently miss the four-digit requirement on B2B invoices. When the recipient reconciles their ITC against GSTR-2B, a missing or blank SAC creates a reconciliation flag that can delay ITC claims.

GSTR-1 Table 12 — HSN/SAC Summary

GSTR-1 Table 12 requires an SAC-wise summary of outward supplies. The digit-level mirrors the invoice rule: above Rs. 5 crore, report at six digits; at or below Rs. 5 crore, report at four digits.

Practical point: Build your SAC master in your accounting software at six digits regardless of current turnover. If you cross Rs. 5 crore during FY 2026-27, every GSTR-1 filed after the crossing point needs six-digit SAC reporting. Retroactively correcting quarterly GSTR-1 filings is cumbersome. Build it right from the start.

Keeping Your SAC Master Current

Map each SAC in your ERP to the rate notification serial number — for example, SAC 998314 (IT software development) → Notification 11/2017-CT(Rate), Serial No. 15 → 18%. When a GST Council meeting amends rates or conditions for a service category, update the mapping before issuing invoices under the new rate, not after filing GSTR-3B. Council decisions take effect from the notification date (typically published on the CBIC website within days of the Council meeting) — not the meeting date itself.

Worked Example: A Rs. 50 Lakh Construction Contract and a Rs. 4.1 Lakh Bill of Error

Scenario: A civil contractor executes a Rs. 50 lakh (exclusive of GST) works contract to build a private commercial office for a listed company. The contractor's accounts team has seen a 12% rate for construction works in the notifications and applies it across all construction billings. The correct rate for works contract for a private commercial building under SAC 995413 is 18%.

The tax arithmetic:

The contractor deposits Rs. 6 lakh. CBIC's audit wing or the recipient's GST consultant flags the mismatch 18 months after the first invoice.

The resulting additional liability:

• Tax shortfall: Rs. 3,00,000
• Interest under Section 50, CGST Act @ 18% per annum for 18 months: Rs. 3,00,000 × 18% × (18 ÷ 12) = Rs. 81,000
• Penalty under Section 73(8) for bona fide non-fraud cases: 10% of tax = Rs. 30,000
• Total additional outflow: Rs. 4,11,000

The contractor now has to recover Rs. 3 lakh in GST from a customer with a finished building, a closed account, and no contractual obligation to pay more — or absorb the entire liability from project margin.

What the fix looks like done correctly: Before invoicing, check the rate notification entry for SAC 995413, confirm the counterparty is a private company (not a specified government entity), and invoice at 18% from day one. A five-minute check at the start of the engagement eliminates Rs. 4.1 lakh in exposure.

Common Mistakes and Pitfalls to Avoid

Using a four-digit heading code when six digits are mandatory. Writing SAC "9983" on an invoice issued by a firm with Rs. 6 crore turnover is non-compliant under Rule 46. Use the specific sub-code: 998311 for management consulting, 998312 for business consulting, 998314 for IT software services, and so on. The four-digit code is a legislative reference, not an invoice entry.

Applying the government works contract rate to private sector projects. The 12% rate under SAC 9954 entries for works contracts is conditioned specifically on the recipient being a defined government or governmental entity. Do not extend it to large private infrastructure projects by analogy. Verify the legal status of the recipient, not just the nature of the project.

Charging GST on genuinely exempt services. If your service is exempt — health services under SAC 9993, approved education services under SAC 9992 — charging GST is an error, not conservative compliance. It creates false ITC in your customer's books, which they will have to reverse when the exemption is discovered, creating friction and potential interest liability for them.

Missing RCM implications tied to specific SACs. Legal services from individual advocates (SAC 998211), GTA services (SAC 996511), and services by a director to a company (SAC 998319 among others) trigger RCM liability on the recipient. The SAC on the supplier's invoice is the signal the recipient uses to recognise and discharge RCM. If the SAC is mis-stated, RCM may be missed entirely — which becomes the recipient's demand, not the supplier's.

Not refreshing the SAC master after GST Council meetings. Rate changes on services take effect from the date of the amending notification, which can be issued weeks after the Council meeting. A hotel that misses a rate change on SAC 9963 and continues billing at the old rate for one quarter creates a GSTR-3B underpayment that attracts interest from the due date of the relevant tax period.

Leaving the SAC field blank when unsure. Every service has an SAC. If you cannot locate the specific sub-code, use the residual entry for your broad heading (e.g., 999799 for services not elsewhere classified) rather than leaving the field blank. A blank SAC in GSTR-1 Table 12 triggers a filing error and downstream scrutiny.

Key Takeaways

• SAC is the GST identity of every service: a six-digit code that determines rate, invoice mandatory fields and GSTR-1 classification — built on the Heading 99 gateway for all services in India.
• 18% is the standard B2B rate for most professional, IT, telecom, financial and support services; the critical exceptions are construction (1%–18%), restaurant (5%/18%), GTA (5%/12% forward/RCM), and largely exempt health and education categories.
• SAC 9954 carries the highest rate-dispute risk: the applicable rate depends on building type and the legal identity of the counterparty — verify both before raising a single invoice on a construction or works contract engagement.
• Turnover determines digit depth: above Rs. 5 crore annual aggregate turnover, use six-digit SAC on every invoice and in GSTR-1 Table 12; at or below Rs. 5 crore, four digits on B2B invoices.
• A misclassification on a Rs. 50 lakh contract can cost Rs. 4+ lakh in tax shortfall, interest and penalty — the verified SAC takes five minutes; the demand notice takes months to resolve.
• *Use the CBIC SAC search tool, read both the SAC description and the rate notification entry*, and file for an Advance Ruling under Section 97, CGST Act before billing on any genuinely ambiguous classification.
• Build and maintain a SAC master in your ERP mapped to notification serial numbers; update it within one week of every GST Council notification to ensure your invoices, GSTR-1 and GSTR-3B remain in sync from the first tax period of the amended rate.