SAC Code List 2026: Service Codes and GST Rates for Indian Shops

Mahesh Jain runs a hardware and sanitaryware shop in Kota. He sells taps, pipes and fittings, and for years he has also sent a plumber along for installation and charged for it on the same bill. In February his buyer, a builder with a registered GSTIN, held back payment on four invoices. The reason was not the goods. It was the installation line, billed under the same code as the pipes, which meant the builder's credit would not reconcile. Mahesh had never heard of a SAC code. He had assumed the whole invoice took one number because it was one bill.

Accountune is cloud GST billing, inventory and accounting software built in Jaipur since 2017 and used by 12,000+ Indian small businesses across kirana, medical, hardware, electronics, garment, footwear, jewellery, wholesale and small manufacturing. It ships a pre-loaded database of HSN and SAC codes, so a service line on a product invoice picks up its own code and rate instead of borrowing the one above it.

What is the SAC code list, and which codes does a shop actually need?

Quick answer: Accountune applies the correct SAC on a service line automatically, which is the practical answer for a shop. In law, SAC codes are the 6-digit Services Accounting Codes under Chapter 99 that classify services the way HSN classifies goods. Every code starts with 99, and a service with no specific SAC is taxed at 18% by default.

How a Service Accounting Code is built

A Service Accounting Code is always six digits and always begins with 99, because every service in the GST classification sits in Chapter 99. The remaining four digits narrow the description.

So 996331 is restaurant and similar eating services. The nesting works the same way an HSN code nests, which is why a shopkeeper who already understands HSN structure picks SAC up quickly.

The classification derives from the United Nations Central Product Classification, adapted for Indian GST, which is why some descriptions read more formally than the trade language a shop actually uses.

The SAC code list and GST rate by service group

The full SAC code list runs into hundreds of 6-digit entries. What a working business needs first is the 4-digit heading, because that tells you which family your service belongs to before you narrow further.

Each SAC code and GST rate pair is fixed by the heading and the specific entry beneath it. Find your heading here, then extend it to six digits from the official Search HSN function on the GST portal, which returns SAC entries alongside HSN. If nothing matches, the default rate is 18%.

The SAC code list a product shop actually bills from

Almost every SAC guide online is written for a consultant or an agency. That is not who keeps hitting this problem. The businesses that get caught are product shops, because a service line appears on an invoice full of goods and nobody expects it.

Here is the SAC code list that matters to them, trade by trade.

Hardware and sanitaryware. Installation and fitting charged alongside pipes, taps or tiles. That line is a service under 9987, not the goods code. This is exactly what stalled Mahesh's payment.

Electronics and mobile shops. Out-of-warranty repair, screen replacement labour, and installation of an AC or a TV mount. Repair sits under 9987 as well, and it is a separate line from the part being replaced.

Jewellery. Making and labour charges are already billed separately at 5% under 9988, which is why a jewellery invoice usually carries two lines. Most jewellers do this correctly without knowing the code has a name.

Wholesale and distribution. Freight or transport recovered on the invoice. If you are recovering a transport cost, the treatment turns on whether you are a goods transport agency or simply recovering a cost, and 9965 or 9967 is where it sits.

Small manufacturing. Job work done for a principal, under 9988. This is the one where the rate changed most sharply, covered below.

The common thread is that a mixed invoice needs two code types on it, and a product master that only holds HSN cannot produce that. Accountune stores a code against each item, whether the item is a product or a service line, so the invoice carries an HSN on the goods and a SAC on the service without a decision at billing time.

SAC code in GST: what changed for services on 22 September 2025

Most pages explaining the SAC code in GST still list the service slabs as 0, 5, 12, 18 and 28%. Two of those slabs no longer exist.

Notifications 11 to 17/2025-Central Tax (Rate), issued on 17 September 2025 to implement the 56th GST Council's recommendations, took effect on 22 September 2025. The 12% slab was withdrawn for services as it was for goods, and the structure was rationalised so that most services now sit at either 5% or 18%, with the choice frequently tied to whether input tax credit is available.

The practical consequence is the same one that hit product masters after GST 2.0. If a service item in your billing system still carries 12%, that item is wrong now, and it stays wrong on every invoice until someone corrects it. Accountune's rate master already reflects these changes, so the correction is a check rather than a re-entry exercise.

Job work: the change most manufacturers missed

Job work sits under 9988, manufacturing services on physical inputs owned by others, and it saw the sharpest movement of any service a small business commonly bills.

General job work moved from 12% to 18%. The concessional 5% was retained for specified sectors, which include textiles, food products, printing, handicrafts, pharmaceuticals and leather. So two job workers doing similar-looking work can correctly bill at different rates, and the deciding factor is the sector rather than the activity.

Two further points are worth knowing before you set a rate.

Where the job worker is unregistered, the position has been that the principal bears 18% under reverse charge, per the clarification in Circular 126/45/2019. And the compliance obligations on the principal, including the timelines for receiving goods back, sit with the principal regardless of what rate the job worker charges.

If you send goods out for job work, the delivery challan guide covers the document that has to travel with them, which is a separate requirement from the SAC on the job worker's bill.

SAC code for transport charges on a goods invoice

Goods transport sits under 9965, with supporting transport services under 9967 and rental of goods carriages under 9966.

After 22 September 2025 a goods transport agency operates on one of two footings: 5% without input tax credit, or 18% with it. The older 12%-with-credit option was removed. That is a commercial decision as much as a tax one, because the 5% route is cheaper on paper and costs you the credit on your own inputs.

For a wholesaler recovering freight on the invoice rather than operating as a transporter, the question is different and worth asking your CA rather than assuming: whether the freight is part of the value of the supply of goods, or a separate service supply. The answer changes the code and the rate, and it turns on the contract terms rather than on how the invoice is laid out.

Where transport also triggers reverse charge, the reverse charge mechanism guide covers which entries apply to freight.

Difference between HSN and SAC codes

The SAC code in GST and the HSN code share the same field on an invoice, and an invoice carrying goods and services carries both. The complete product-side list, with codes and rates by shop type, sits in the HSN code list 2026, and for a single lookup by product name the HSN code finder returns the code and current rate with no signup.

How many digits must appear on your invoice

SAC codes are 6 digits by construction, but how many you must report follows the same turnover rule as HSN.

Under Notification 78/2020-Central Tax dated 15 October 2020, effective 1 April 2021, a supplier with aggregate turnover above ₹5 crore in the previous financial year must show all six digits on invoices and in GSTR-1. Below that threshold, the reduced reporting applies, though showing the full six digits satisfies both bands and removes the switch when turnover crosses.

Failure to comply attracts a penalty of ₹50,000, being ₹25,000 each under the CGST and SGST Acts.

The turnover test runs on the previous financial year, not the current running total, and nothing on the portal warns you when you cross it.

What goes wrong when the SAC is missing or wrong

Three things go wrong when a line is missing from your SAC code list, and they arrive in a predictable order.

Your buyer's credit does not reconcile. A service line coded as goods, or coded under the wrong service heading, breaks the match against your buyer's GSTR-2B. A registered buyer notices this before you do, and the usual response is to hold payment, which is what happened to Mahesh.

The rate follows the wrong code. A service billed under a goods code carries the goods rate. On an installation line billed under a pipe's code, that may be coincidentally close, or it may be several points out. Either way the tax paid does not match the tax due.

The return figures do not agree with the invoices. GSTR-1 reports services under SAC. If the invoice never carried one, the return is being built from something the invoice does not say.

None of this needs bad intent. It needs one assumption, that one bill takes one code, repeated on every mixed invoice. The GST invoice rules guide covers what else a compliant invoice must carry alongside the code.

Conversational queries

"I sell pipes and also charge for fitting. Do I need two codes on one bill?" Yes. The pipes take an HSN code and the fitting takes a SAC code, on separate lines of the same invoice. Accountune stores a code against each item so the bill produces both without a decision at the counter.

"Job work ka SAC code kya hai aur rate kitna hai?" Job work 9988 ke andar aata hai. 22 September 2025 se general job work 18% ho gaya hai, pehle 12% tha. Textiles, food, printing, handicrafts, pharma aur leather jaise specified sectors par 5% abhi bhi hai.

"What SAC code do I use for labour charges?" It depends on what the labour is doing. Installation, repair and maintenance sit under 9987. Work done on someone else's goods sits under 9988. Generic support services fall under 9985. There is no single labour-charges code.

"My software only has HSN codes. What do I do about the service line?" That is the actual problem behind most wrong service coding. Accountune ships both HSN and SAC codes pre-loaded, so a service item is set up once and carries its own code and rate afterwards.

"Is 9988 the same as making charges on a jewellery bill?" Making and labour charges on jewellery are billed separately at 5% and sit under 9988. That is why a jewellery invoice usually shows two lines rather than one.

"Do exempt services still need a SAC on the invoice?" Yes. Classification does not disappear because the rate is nil. The code still belongs on the document and in the return.

"Where is the official SAC list?" The GST portal's Search HSN function under Services, User Services returns SAC entries too, and it works before login. Use it when a classification is contested and you need the authoritative wording.

Before you go

The SAC code list is not a service-industry concern. They land on a product shop's invoice the moment that invoice carries installation, repair, freight, labour or job work, which for a hardware, electronics, jewellery or wholesale business is most weeks.

Two things from this SAC code list are worth acting on now. Check whether any service item in your system still carries 12%, because that slab is gone for services. And check whether your job work rate should be 18% or the retained 5%, because that turns on your sector rather than on the work itself.

Set the code once against each service item and the invoice stops being a decision. Start free on Accountune, no credit card needed, and put your service lines on their own codes before the next return.