SAC Code stands for Services Accounting Code. While goods are classified using HSN, services (like legal advice, interior design, transportation, or construction) are classified using SAC. It is a classification system managed by the Central Board of Indirect Taxes and Customs (CBIC) to identify the nature of services for GST levy.
When you ask “what is SAC Code in GST,” you are looking for the 6-digit number starting with ’99’ that identifies your service profession. For example, all IT services fall under one block, and legal services under another.
What Does SAC Code Mean?
All SAC codes begin with the number 99.
- First 2 digits: 99 (Constant for all services).
- Next 2 digits: Major Nature of Service (e.g., 9954 for Construction).
- Last 2 digits: Detailed Nature (e.g., 995411 for Construction of residential buildings).
Why SAC Code is Important
- Compliance: It is mandatory to mention SAC on tax invoices for service providers.
- GSTR Filing: You must report your turnover SAC-wise in GSTR-1.
- Exemptions: Many exemptions (like healthcare or education) are defined based on specific SAC codes.
Where is SAC Code Used?
- Invoices: Freelancers, Chartered Accountants, and Architects must print this on bills.
- Registration: Selected during GST registration to define business activity.
How to Find or Check SAC Code
Official Search:
1. Go to GST Portal.
2. Services > User Services > Search HSN/SAC Code.
3. Select “Services” radio button.
4. Type “Rent” or “Transport”.
5. The system displays codes like 997211 (Rental services).
Example of SAC Codes
998311: Management Consulting
996311: Room accommodation (Hotels)
9954: Construction Services
Common Problems or Errors
- Confusing HSN and SAC: Software products (on CD) use HSN, while Software development (download/service) uses SAC. This distinction is crucial.
- Works Contract: Construction often involves both goods and services. However, it is usually treated as a service under SAC 9954.
Important Things to Remember
- All SAC codes start with 99.
- Ensure your invoice clearly states “SAC” column, not HSN.
- Check GSTIN Number validity of the receiver to pass on credit.
- If you are an exporter of services, see what is LUT in GST.
Frequently Asked Questions
Is SAC code mandatory for freelancers?
Yes, if you are registered under GST, you must mention the SAC code (usually 9983 for technical/professional services) on your invoice.
How many digits of SAC code are required?
Usually, the 6-digit SAC code is standard. Unlike HSN, the variation in digits based on turnover is less emphasized, but mentioning 6 digits is best practice.
What is the SAC code for Rent?
For renting commercial property, the SAC is usually 997212. For residential renting (which is often exempt), it is 997211.
Can I have both HSN and SAC codes?
Yes, if your business supplies both goods (e.g., selling ACs) and services (e.g., installation charges), your invoice will have rows for HSN and rows for SAC.
Where can I get the full list of SAC codes?
The full explanatory notes on SAC codes are available on the CBIC website under the GST Act section or the GST portal search tool.