GST

SAC Code

A numerical code used to classify services under the GST system

Definition

SAC stands for Services Accounting Code, a classification system used under GST in India to identify and categorise different types of services. While HSN codes are used for goods, SAC codes serve the same purpose for services. SAC codes are 6-digit numbers where the first two digits are always 99, indicating a service category, followed by digits that narrow down the specific service type. Every service provider registered under GST must mention the applicable SAC code on their invoices and while filing GST returns. The SAC code determines the GST rate applicable to a particular service, which can be 5%, 12%, 18%, or 28%. Businesses that provide both goods and services need to use both HSN and SAC codes on their invoices. Correct SAC code classification ensures proper tax collection, accurate return filing, and helps avoid discrepancies that could trigger GST audit notices or demand letters from the tax authority.

How It Works

  1. 1Every service in India is classified under a 6-digit SAC code, where the first two digits are always 99 (indicating a service), followed by digits that specify the service category and sub-category.
  2. 2When you create a sales invoice for a service, you select or enter the applicable SAC code, and the system automatically applies the correct GST rate.
  3. 3The SAC code appears on the invoice alongside the service description, making it clear to the buyer and tax authorities which service is being billed.
  4. 4During GST return filing, the SAC code is reported to classify your service revenue correctly and ensure proper tax computation.

Example

An IT services company in Bengaluru provides software development, cloud hosting, and training services. Software development falls under SAC code 998314 (taxed at 18%), cloud hosting under SAC code 998315 (taxed at 18%), and training services under SAC code 999293 (taxed at 18%). When billing a client Rs. 5,00,000 for a software project, the invoice must mention SAC code 998314 and charge 18% GST, making the total Rs. 5,00,000 + Rs. 90,000 GST = Rs. 5,90,000.

How Stock Register Handles This

  • Search and select from a built-in SAC code directory — no need to look up codes manually on government websites
  • Auto-apply the correct GST rate (5%, 12%, 18%, or 28%) based on the SAC code selected for each service
  • Save frequently used SAC codes with your service items for one-tap invoicing without re-entering codes each time
  • Generate GST-compliant service invoices with proper SAC code placement as required by tax authorities

Related Terms

HSN CodeGST (Goods and Services Tax)Sales Invoice / Bill

Related Guides

GST Reports Guide

Frequently Asked Questions

What is the difference between HSN code and SAC code?

HSN codes classify goods (physical products) and are typically 4-8 digits, while SAC codes classify services and are always 6 digits starting with 99. If your business provides both goods and services, you need to use both codes on your invoices.

How do I find the correct SAC code for my service?

You can search for your service type in Stock Register's built-in SAC directory, or refer to the official CBIC website. Common examples: accounting services (998221), restaurant services (996331), transport services (996511), and IT services (998314).

Is it mandatory to mention SAC code on every service invoice?

Yes, GST-registered businesses must mention the SAC code on all service invoices. Businesses with turnover above ₹5 crore must use 6-digit codes, while those below can use 4-digit codes. Incorrect or missing SAC codes can lead to GST notice or ITC rejection for your client.

Ready to Get Started?

Manage inventory, billing, and accounting effortlessly.

Start Free TrialView Pricing
Back to Glossary