What is SAC Code?

SAC (Services Accounting Code) is a classification system, derived from India's own services classification scheme, used under GST specifically for services — mirroring the role HSN codes play for goods. Every taxable service is assigned a 6-digit SAC code that helps determine the applicable GST rate and standardises how services are reported on invoices and in GST returns.

• SAC codes in GST are typically 6 digits, with the first two digits generally being "99" (indicating a service), followed by digits that classify the broad category and sub-category of the service.
• SAC codes are mentioned on tax invoices for services, similar to how HSN codes are mentioned for goods, and are also used in GSTR-1's HSN/SAC summary.

• Service providers registered under GST are required to mention the applicable SAC code on their invoices, with requirements around the number of digits depending on turnover slabs, similar to the HSN digit-wise requirement — check the current rule on cbic-gst.gov.in.

• Using a generic or incorrect SAC code, resulting in the wrong GST rate being applied to a service.
• Confusing SAC (for services) with HSN (for goods) on an invoice for a business that supplies both.
• Not updating the SAC code when the nature of the service offering changes.