SAC code
What SAC code means, how it works, a worked example, the mistakes we see and the questions founders ask.
DefinitionA SAC code is the six-digit Services Accounting Code, beginning with 99, that classifies a service under GST and determines its tax rate on invoices and returns.
Where goods use HSN codes, services use SAC codes drawn from the UN Central Product Classification and adapted by the GST Council. Every SAC begins with 99, followed by two digits for the broad heading, such as 9983 for professional and technical services or 9984 for telecom and IT, and two more for the specific service. Most services sit at 18%, with a short list at 5% or nil. You must quote SAC on tax invoices to the same digit rule as HSN, at least 4 digits up to ₹5 crore turnover and 6 digits above, and summarise supplies by SAC in GSTR-1. You meet it when you set up your first invoice template and when registering for GST, where you declare your top services. What it means for you: a wrong SAC can put you at the wrong rate or the wrong place of supply, so confirm it once and keep it consistent.
How SAC code works
Services Accounting Codes classify services for GST the way HSN classifies goods. Every SAC begins with 99; the next two digits give the section (9983 is professional and technical services, 9954 construction, 9961 and 9962 trading services), and the final two the specific service (998314 is IT design and development, 998313 IT consulting). The rate schedule for services is written against these codes.
The digit rule mirrors HSN: four digits on invoices for turnover up to ₹5 crore (optional for B2C), six digits above it, and six under e-invoicing. The SAC appears on each service line of the invoice and in the GSTR-1 summary.
Most services attract 18%, so for many businesses the SAC changes little about the tax, but it matters for the exceptions: the 5% and 12% rates on transport and job work, exemptions on education and health, the composition rate for restaurants, and the reverse charge entries that are defined by service category.
A Hyderabad software company invoices a client for custom development (998314) and separately for annual maintenance (998313). Both are 18%, but the codes also feed its export invoices, where the LUT and the zero-rated treatment depend on correctly describing the supply as a service with place of supply abroad.
Mistakes we see with SAC code
- Using one generic SAC (such as 9983) for every service line, which the portal accepts at four digits but which hides exempt or lower-rated services.
- Charging 18% on a service that is exempt or 5% because the SAC was never checked against the rate notification.
- Treating a bundled supply of goods and services as a service to pick a convenient rate, when the composite supply rule says the principal supply decides.
Last updated 19 October 2026. Checked against the MCA, GST, Income-tax and Trade Marks rules in force for October 2026.
Where you will meet this term
Questions founders ask about SAC code
What is the difference between HSN and SAC?
HSN classifies goods and runs to eight digits; SAC classifies services, always six digits beginning with 99. Both determine the GST rate and must appear on tax invoices and in GSTR-1.
Do I need a SAC on a B2C invoice?
Only if your turnover is above ₹5 crore. Below that, the code is optional on invoices to unregistered customers but still required on B2B invoices.
Which SAC applies to IT services?
Software development and design is 998314, IT consulting 998313, cloud and web hosting 998315, and IT support 998316. All are 18%.