What is the SAC Code in GST?

What is the SAC Code in GST?

In its complete form, the SAC code is the Service accounting code, a nomenclature system introduced by the Central Board of Indirect Taxes and Customs (CBIC). These codes are used to identify services and GST rates associated with these services to compute tax liability. The SAC (Services and Accounting Code) codes depend on the Harmonized System of Nomenclature, a globally perceived framework for arranging and classifying all services. This framework empowers the consistency of GST dependent on universal principles. It will give a typical structure to the government for collecting data or analyzing the equivalent.

GST SAC Code Defined

The SAC complete form in GST means the Services Accounting Code under which services that fall under GST are classified. HSN and SAC codes are used to classify goods and services under the GST regime in India.

What is SAC in GST?

Under GST law, SAC refers to the 6-digit SAC in GST. For instance, the SAC for catering services provided on flights, trains, etc., is 99.82.13.

  1. The initial two digits in SAC are the same for all services, i.e., 99.
  2. The next two digits state the significant idea of services(82) and say, in this situation, catering services. 
  3. The last two digits display the nature of services (13), i.e., in this situation, catering services are provided on flights, trains, and so forth.

How are SAC codes necessary for business?

Here are the reasons why SAC codes are essential for business:

  • They help the company and client distinguish their service’s GST rates.
  • At the time of GST registration and invoicing, you must mention the SAC code.
  • These codes help to recognize and determine the benefits of the vast number of services available.

The distinction between HSN and the SAC Code

The primary difference between the HSN and SAC codes is that the HSN is used to identify goods, and the SAC codes are used to determine the services. Another contrast is the number of digits present in the code. For instance, the HSN number has 8-digit codes, while the SAC number has 6-digit codes. GST rates and SAC codes for various services. The SAC codes include GST rates on the services mentioned in the SAC codes. Hence, it is essential to know the SAC codes. To understand the GST rates and SAC codes of multiple services you may receive under GST, visit this page.

Is it compulsory to specify the SAC code in the invoice?

Service providers must use SAC codes when filing GST returns and issuing invoices. The criteria for providing the SAC code in the GSTR form are as follows.

  • The SAC code isn’t compulsory if the organization’s turnover exceeds 1.5 crore INR. 
  • The SAC code is mandatory for businesses with over 1.5 crore INR.

Is it compulsory to specify the SAC code in the invoice?

SAC codes are utilized to identify various services rendered by business organizations. Specify the SAC code in the invoice if the service provider’s annual revenue exceeds 1.5 crores INR. Moreover, during GSTR filling, they should select the SAC code for GSTR filling. This not only saves time for the organization but also helps to keep a check on the finances.

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