SAC Code for Consultancy Charges

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With the introduction of GST, the taxation system in India has gone through a significant transformation with the aim to simplify the process. Along with this change, a new term called SAC codes (Services Accounting Codes) is constantly being used by the taxpayers.

The SAC code for consultancy services is essential for both consultants and businesses availing these services. It not only ensures compliance with tax regulations but also provides clarity on the applicable rates and exemptions.

In this article, we will talk about the SAC code classification for consultancy charges and understand why it is important for companies in today’s business environment.

What are SAC Codes for Consultancy?

SAC stands for Service Accounting Code and it’s a six-digit code assigned to different services under the Goods and Services Tax (GST) regime in India. SAC codes help classify services to apply the correct GST rate, file returns, and maintain proper accounting records.

Moreover, SAC code for consultancy services falls under Chapter 99 of HSN Code Lists and a broad category of 9983- “Other professional services.” However, depending on the specific type of consultancy, there might be more precise sub-codes.

What is the Scope of SAC Code 9983?

The consultancy services SAC code 9983 consists of a broad range of specialized services which show their versatility in the professional service sector. Here are some of the examples of services that are covered under SAC code 9983:

  • Security Services: Services that ensure safety and security like manned guarding, access controls, CCTV surveillance, alarm monitoring, etc.
  • Graphic Designing: Professionals that use their skills to create visual content such as logos, websites, brochures, ad copy, and other design projects.
  • Specialized photography services: Fashion, aerial, product photography, wildlife, and other forms of photography that fall under this section.
  • Interior Designing: These services include designing or decorating the interior space to enhance their look and functionality. It includes both commercial and residential properties.
  • Event Management: Professionals who excel in planning and managing events, exhibitions, weddings, parties, get together, and more.

How Is Services Accounting Codes (SAC) Derived?

SAC (Services and Accounting Codes) are based on HSN (Harmonized System of Nomenclature) codes, which is an internationally recognized system for classifying products worldwide. Business consultancy services sac code is used by organizations to file their GST returns and pay accurate taxes to the government.

To understand how this 6-digit SAC in GST is derived, let’s take an example for the code 998314. This is the SAC code for IT consultancy services and IT design and development services.

  • The initial two digits in the SAC are the same for all services, which is 99. Which indicates Chapter 99 of the HSN code.
  • The middle two digits state the nature of services, in this case, IT services.
  • The last two digits indicate the detailed and specific nature of the service, which is Design and Development in this case.

The main difference between the SAC and HSN is that SAC specifies codes for services and HSN codes are meant specifically for Goods. Another difference is the number of digits in their code, for instance, SAC has 6 digits and HSN code has 8 Digit codes.

Why are SAC Codes Important?

SAC codes, or Services Accounting Codes for consultancy services, hold significant importance in India’s Goods and Services Tax (GST) regime.

SAC codes provide a standardized system for classifying and identifying various services rendered under GST. This uniformity eases record-keeping, returns filing, and communication between businesses and tax authorities.

Furthermore, each SAC code is linked to a specific GST rate (0%, 5%, 12%, 18%, or 28%). By accurately identifying the service provided using the right SAC code, businesses can ensure they apply the correct tax rate, avoiding errors and potential penalties.

SAC Code for Business Consultancy Services and IT Consultancy Services

Business Consultancy Services and IT Consultancy Services come under the SAC code 998312. The SAC code for consultancy services, developed by the service tax department in India, helps determine the GST rate for these services, which can range from 0% to 28%. Similarly, the HSN code is used for taxing commodities, which also ranges from 0% to 28%.

For IT service providers, GST registration is mandatory if their annual taxable services exceed ₹ 20 lakh, they engage in interstate supply of goods or services, and provide OIDAR (Online Information Database Access and Retrieval) services.

SAC Codes & GST Rate for Services

Below is the categorization for the SAC Code for consultancy services under GST:

SAC CodesDescriptionGST Rate
9983Services offered by Central or State Government, Union territory or local authorityNil
9983Taxable services provided by certain organizations like Technology Business Incubators, Science and Technology Entrepreneurship Parks, and bio-incubators, which are officially recognized by the Government of IndiaNil
9983Services offered by:
1. The National Skill Development Corporation established by the Government of India;
2. A Sector Skill Council endorsed by the National Skill Development Corporation;
3. An evaluation agency sanctioned by the Sector Skill Council or the National Skill Development Corporation;
4. A training collaborator approved by either the National Skill Development Corporation or the Sector Skill Council, pertaining to:

a. The National Skill Development Program executed by the National Skill Development Corporation;
b. A vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or
c. Any other scheme administered by the National Skill Development Corporation.
Nil
9983The Directorate General of Training, under the Ministry of Skill Development and Entrepreneurship, enlists assessment bodies centrally to evaluate services as part of the Skill Development Initiative SchemeNil
9983Services that involve the authorization, enrollment, and evaluation of food samples provided by the Food Safety and Standards Authority of India (FSSAI) to any Food Business Operators.Nil
998311Financial, HR, strategic, operations, supply chain and marketing management services18%
998312Business consulting including public relations services18%
998313IT support and consulting services18%
998314IT development and designing services18%
998315IT and Hosting provisioning services18%
998316Network management and IT infrastructure services18%
998319Other IT services18%
998321Architectural advisory services18%
998322Residential architectural services18%
998323Non-residential architectural services18%
998324Restoration of historical architectural services18%
998325Urban planning services18%
998326Rural planning services18%
998327Master planning services for project site18%
998328Architectural services18%
998331Engineering advisory services18%
998332Building projects engineering services18%
998333Industrial and manufacturing engineering services18%
998334Transportation engineering services18%
998335Power projects engineering services18%
998336Broadcasting and telecommunication engineering services18%
998337Waste management engineering services (both hazardous and non-hazardous), for sewage, drainage and water projects.18%
998338Other engineering services18%
998339Construction project management services18%
998341Geophysical and geological consulting services18%
998342Subsurface & surveying services18%
998343Mineral evaluation and exploration18%
998344Map-making and surface surveying services18%
998345Meteorological and weather forecasting services18%
998346Technical analysis and testing services18%
998347Certification of dams, ships, aircraft, etc.18%
998348Authentication and certification of artworks18%
998349Other scientific and technical services18%
998351Pet animals (health care) veterinary servicesNil
998352Livestock Veterinary servicesNil
998359Other veterinary services18%
998361Advertising Services18%
998362Sale or purchase of ad space on commission18%
998363Sale of advertising space under print media (excluding commission)5%
998364Sale of radio and TV advertising time18%
998365Sale of online advertising space18%
998366Sale of advertising space or time (excluding commissions)18%
998371Market research services18%
998372Public opinion or polling services18%
998381Portrait photography18%
998382Advertising related photography services18%
998383Event photography & videography services18%
998384Special photography services18%
998385Retouching and editing services of photography18%
998386Videographic & photographic processing services18%
998387Specialized videography & photography along with their processing services18%
998391Specialty designing services such as interior design, fashion design, commercial designs and other18%
998392Design originals18%
998393Technical and Scientific consulting services18%
998394Original compilations of information/facts18%
998395Interpretation and translation services18%
998396Franchises and trademarks18%
998397Sponsorship and Brand Promotions18%
998399Other technical, business and professional services.18%

Conclusion

SAC codes play a vital role in the GST regime, particularly for consultancy services. These codes provide a structured framework for classifying various services, ensuring accurate tax calculation and compliance.

The scope of SAC code encompasses diverse consultancy services, from IT to SAC code for tax consultancy services, each with its specific code and GST rate.

By understanding and applying the correct SAC code, businesses can navigate taxation efficiently and maintain regulatory adherence, facilitating smooth operations in the dynamic business landscape of India.

Published On: February 9, 2024

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