The full form of SAC Code is Services Accounting Code. SAC code in GST is a classification system that was developed by the Service Tax Department in India. It was developed for the classification of services. The GST Council had adopted the SAC code system to levy GST in India. In this article, we will let you understand all about the SAC code for all services along with GST rates.
Article Content-
- Understanding the Meaning of the SAC Code
- Advantages of SAC Code s Under GST
- Structure of SAC Code
- SAC Code List
- Who can use the SAC code?
- Why is SAC Code so important to your company?
- What is the Harmonized System of Nomenclature (HSN)?
- Structure of HSN Code
- Sections under HSN system
- Difference between HSN code and SAC code
- How does SWIL product help boost your company’s sales?
Understanding the Meaning of the SAC Code
The Government of India introduced the SAC System that groups up services under GST. SAC code in India is based on the Harmonized System of Nomenclature. It is an internationally recognized system. It helps to classify and codify all the products in the world. GST is levied in mainly 5 slabs 0%, 5%, 12%, 18%, and 28%. For all the services that aren’t mentioned in the list where the SAC code is not available, a default rate of 18% is applied.
Each service offered has a unique SAC code, as well as a unique HSN for different product categories. Those involved in the provision of Services must use the SAC Code. This helps to clearly understand and use the taxes levied on the services provided and received.
SAC helps remove the hurdles in international trade operations. Additionally, SAC codes are also used in invoice and record-keeping procedures. Goods and services offered are identified easily with the help of SAC code. The SAC codes are used to categorize services for better measurement, recognition of services , and taxation process.
The SAC codes are controlled by the Central Board of Excise and Customs (CBEC). The system authorizes the regulation of GST based on international standards. It provides a common structure for the government to collaborate on data related to sales and purchases. They can easily analyze the data for the same.
The SAC under GST was created for uniform taxation, simple tax calculation, and simple tax processing. It also helps governments check the scope of existing services.
Advantages of SAC Codes Under GST
- SAC codes make it easier for both the customer and the business to figure out the exact GST rates that apply to a given service.
- While registering for GST and sending GST invoices, SAC codes must be mentioned.
- These codes aid in identifying the services and setting them apart from the numerous other services that are provided.
Structure of SAC Code
The SAC code in GST is a 6-digit code. Let’s take an example of the SAC code for Information Technology Design and Development Services which is 998314.
The first two digits in the SAC code remain the same for all services. In this case, it is 99.
The middle two digits represent the major nature of the service. In this case, it’s Information Technology.
The last two digits express the in – depth nature of the service. In this case, Design and Development service.
SAC Code List
The SAC codes for several services are mentioned below:-
Building Construction Services
| SAC Code 995412 | Construction services of residential buildings. These include old age homes, hostels, and homeless shelters. |
| SAC Code 995413 | Construction services of the Industrial buildings. These include buildings used for production activities, storage buildings, workshops and other similar industrial buildings. |
| SAC Code 995414 | Construction services of the Commercial buildings. These include exhibition and marriage halls, malls, hotels, restaurants, airports, rail or road terminals, parking garages, office buildings, petrol and service stations, theaters or other similar buildings. |
| SAC Code 995415 | Construction services of non – residential buildings. These include educational institutions, hospitals, clinics, veterinary clinics, courts, prisons, museums and others. |
| SAC Code 995416 | Construction services of other building constructions. |
| SAC Code 995419 | Services that involve Repair, Alterations, Additions, Replacements, Renovation, Maintenance, Remodeling of buildings. |
Civil engineering works Construction Services
| SAC Code 995421 | Construction services of bridges, highways, airfields, streets, roads, railways, and tunnels. |
| SAC Code 995422 | Construction of waterways, damns, harbors, damns, water mains and lines, irrigation and other waterworks. |
| SAC Code 995423 | Construction services of long distance overland / underground / submarine pipelines, communication and electric power lines, pumping stations, transformer stations, related work. |
| SAC Code 995424 | Construction services of sewage pipelines and local water, electricity and communication cables, related work. |
| SAC Code 995425 | Construction services of industrial plants and mines |
| SAC Code 995426 | Construction services of power plants and related infrastructure. |
| SAC Code 995427 | Construction services of recreation facilities and outdoor sports. |
| SAC Code 995428 | Construction services of other civil engineering work |
| SAC Code 995429 | Construction services that include alterations, repair, additions, replacements, renovation, replacements, maintenance, remodeling of constructions covered above. |
Site Preparation Services
| SAC Code 995431 | Demolition services |
| SAC Code 995432 | Clearance services and site formation. These include preparation services to make sites ready for subsequent construction work, digging of trenches, test drilling & boring & core extraction |
| SAC Code 995433 | Earthmoving and excavating services |
| SAC Code 995434 | Septic system installation services and water well drilling services |
| SAC Code 9954356 | Other site preparation services |
| SAC Code 995439 | Services involving Repair, additions, alterations, replacements, maintenance of the constructions covered above. |
Erection and Assembly of prefabricated constructions
| SAC Code 995441 | Installation, assembly and erection services of prefabricated buildings. |
| SAC Code 995442 | Installation, erection and assembly services of other prefabricated constructions. |
| SAC Code 995443 | Installation services of all the types of street furniture such as benches, seats etc. |
| SAC Code 995444 | Other assembly and erection services. |
| SAC Code 995449 | Services involving Repair, additions, alterations, replacements, maintenance of the constructions covered above. |
Special Trade Construction Services
| SAC Code 995451 | Foundation and Pile driving services |
| SAC Code 995452 | Roof Framing and Building framing services. |
| SAC Code 995453 | Waterproofing and roofing services. |
| SAC Code 995454 | Concrete Services. |
| SAC Code 995455 | Structural steel erection services. |
| SAC Code 995456 | Masonry services. |
| SAC Code 995457 | Scaffolding Services. |
| SAC Code 995458 | Any other kind of special trade construction services. |
| SAC Code 995459 | Services that involve Repair, additions, replacements, alterations, maintenance of the constructions covered above. |
Installation Services
| SAC Code 995461 | Electrical installation services. These include electrical wiring & fitting services, burglar alarm system installation services fire alarm installation services. |
| SAC Code 995462 | Drain laying and plumbing services. |
| SAC Code 995463 | Heating, air conditioning equipment, ventilation installation services. |
| SAC Code 995464 | Gas fitting installation services. |
| SAC Code 995465 | Insulation Services |
| SAC Code 995466 | Escalator and lift installation services. |
| SAC Code 995468 | Other Installation services |
| SAC Code 995469 | Services involving Repair, maintenance, alterations, additions, replacements of the installations covered above. |
Building Completion Services
| SAC Code 995471 | Glazing service |
| SAC Code 995472 | Plastering service |
| SAC Code 995473 | Painting service |
| SAC Code 995474 | Wall tiling and painting service |
| SAC Code 995475 | Wall covering, floor laying and wallpapering service |
| SAC Code 995476 | Carpentry and joinery service |
| SAC Code 995477 | Railing and fencing service |
| SAC Code 995478 | Other finishing’s and building completion service |
| SAC Code 995479 | Services that include repair, alterations, replacements, additions, maintenance of completion / finishing works covered above |
Related to Food, Beverage and Tobacco Manufacturing
| SAC Code 998811 | Meat processing Services |
| SAC Code 998812 | Fish processing services |
| SAC Code 998813 | Vegetable and fruit processing service |
| SAC Code 998814 | Animal oil, Vegetable and fat manufacturing service |
| SAC Code 998815 | Dairy Product Manufacturing service |
| SAC Code 998816 | Other food production manufacturing service |
| SAC Code 998817 | Prepared animal feed Manufacturing Services |
| SAC Code 998818 | Beverages manufacturing service |
| SAC Code 998819 | Tobacco manufacturing services |
Wood and Paper Manufacturing
| SAC Code 998831 | Wood and wood product manufacturing service |
| SAC Code 998832 | Paper and paper product manufacturing service |
Petroleum, Pharmaceutical and Chemical Product Manufacturing
| SAC Code 998841 | Refined petroleum and Coke product manufacturing service |
| SAC Code 998842 | Chemical product manufacturing service |
| SAC Code 998843 | Pharma products manufacturing service |
Rubber, Plastic and Non-metallic Mineral Product Manufacturing
| SAC Code 998851 | Plastic and rubber product manufacturing service |
| SAC Code 998852 | Plastic product manufacturing service |
| SAC Code 998853 | Non – metallic mineral product manufacturing service |
Job Work for Basic Metal Manufacturing Services
| SAC Code 998860 | Basic metal manufacturing service |
Job Work for Machinery, Fabricated Metal Product and Equipment Manufacturing
| SAC Code 998871 | Structural metal product, reservoir, steam generator, tank manufacturing service |
| SAC Code 998872 | Ammunition and weapon manufacturing service |
| SAC Code 998873 | Other fabricated metal product manufacturing and treatment service |
| SAC Code 998874 | Computer, optical product and electronic manufacturing service |
| SAC Code 998875 | Electrical equipment manufacturing service |
| SAC Code 998876 | General purpose machinery manufacturing service |
| SAC Code 998877 | Special purpose machinery manufacturing service |
Job Work for Transport Equipment Manufacturing
| SAC Code 998881 | Motor vehicle and trailer manufacturing |
| SAC Code 998882 | Other transport equipment manufacturing service |
Job Work related to other products manufacturing
| SAC Code 998891 | Furniture manufacturing service |
| SAC Code 998892 | Jewelry manufacturing service |
| SAC Code 998893 | Imitation jewelry manufacturing service |
| SAC Code 998894 | Musical instrument manufacturing service |
| SAC Code 998895 | Sports goods manufacturing service |
| SAC Code 998896 | Game and toy manufacturing service |
| SAC Code 998897 | Medical and dental instrument manufacturing service |
| SAC Code 998898 | Other manufacturing service |
Who can use the SAC code?
The SAC code is important to the company. The service provider must use the SAC code upon completion of the GSTR filling.
Services range from providing educational services, hospitality and financial services etc. All services are classified under chapter 99 in the HSN module.
Use of SAC code is not compulsory if companies’ turnover is less than Rs 1.5 crores. SAC code is compulsory if companies’ turnover is between Rs. 1.5 crores to Rs. 5 Crores and above.
Why is SAC Code so important to your company?
- The SAC Code helps businesses and customers distinguish between GST tax rates that apply to a particular service.
- The SAC code must be provided at the time of GST registration and GST billing.
- These codes help identify services and distinguish them from the large number of services available.
What is the Harmonized System of Nomenclature (HSN)?
The Harmonized System of Nomenclature (HSN) was introduced for the purpose of structured classification of goods worldwide. It is used to classify more than 5000 products. It came into action in 1988 and was developed by the World Customs Organization (WCO). It is recognized internationally to codify and classify all products and services globally. It is a system for trade and trade negotiation.
Structure of HSN Code
HSN Code is an 8-digit code that contains the following details:
- 21 Sections
- 99 Chapters
- 1244 Headings
- 5224 Subheadings
Indian manufacturers have to follow the 3-tired HSN structures. There are around 21 groups in the HSN structure. These groups are then categorized into 99 chapters. These chapters are further divided into 1244 headings. And then divided, at last, into 5224 subheadings.
Sections under HSN system
There are 21 sections present under the HSN system with a product list. They are as follows:-
- Section 1 – Live animals
- Section 2 – Vegetables and their products
- Section 3 – Animal and vegetable fats
- Section 4 – Foodstuffs prepared, manufactured tobacco
- Section 5– Mineral products
- Section 6– Chemical products
- Section 7 -Plastic and rubber products
- Section 8 – Raw skins and hides, Fur skins, Leathers and related articles, harness and saddlery, travel goods, handbags and similar articles, products made of animal gut (other than silkworm guts)
- Section 9– Wood and word articles, charcoal made of wood, cork and cork articles, straw manufacturers, of Esparto or of other Plaiting materials
- Section 10– Wood pulp or of any other fibrous cellulosic materials, Paperboard or Recovered paper, Paper and paperboard articles
- Section 11 – Textile articles
- Section 12 – Headgears, Footwear, Sun Umbrellas, Umbrellas, Seat – sticks, Walking – sticks, Riding – crops, Whips, Feather articles and prepared feather articles, Articles made of human hair, artificial flowers
- Section 13– Stone articles, Plaster, Asbestos, Cement, Mica or similar materials, glass and glass wear products, ceramic products
- Section 14– Natural or cultured pearls, semi – precious or precious stones, Metal clad with precious metal, Imitation jewelry, coins
- Section 15– Base metals, articles of base metals
- Section 16– Machinery, mechanical appliances, electrical equipments, sound recorders, reproducers, television image and similar recorders and reproducers, parts and accessories of such articles
- Section 17 – Aircraft, vehicles, vessels and related transport equipment
- Section 18– Cinematographic, Optical, Photographic, measuring, checking, precision, medical or surgical instruments and apparatus, watches and clocks, musical instruments, parts and accessories thereof
- Section 19– Arms and ammunition, accessories and parts
- Section 20– Miscellaneous manufactured articles
- Section 21– Collectors’ Piece, Works of arts, Antiques
Difference between HSN code and SAC code
The basic difference between an HSN code and a SAC code is that the HSN is used to identify goods. Whereas, the SAC code is used to identify services. Another distinguishing factor between the two is the number of digits in the code. For example, HSN numbers have an 8-digit code and SAC numbers have a 6-digit code.
How does SWIL product help boost your company’s sales? (Considering HSN & SAC)
With the advent of the digital age, billing systems are essential to the retail industry. SWIL product is a robust billing system that simplifies the billing process. We provide comprehensive GST billing and filing procedures. This is the best solution to handle the billing process with minimal resources. Create invoices and manage cash / credit management. Also, monitor sales and purchase activities. Audit accounts, taxes, invoices / orders, search for items, and generate store-level reports. Check out SWIL product today!
