A SAC code is the classification number for a service under GST. It has 6 digits and starts with 99: the next 2 digits are the heading, then the group and the service. For example, heading 9988 covers manufacturing services on goods owned by others (job work) and heading 9968 covers postal and courier services. Use it on invoices for services the same way you use HSN for goods.
How a SAC code is structured
| Part | Digits | Example |
|---|---|---|
| Chapter | 99 | All services |
| Heading | 4 digits | 9988: Manufacturing services on physical inputs owned by others |
| Group | 5 digits | Narrower group of services |
| Service code | 6 digits | The specific service |
Because every SAC starts with 99, "4 digits" for a service means the heading, such as 9968 or 9988. The digit requirement under Rule 46 is the same as for goods: 4 digits up to ₹5 crore aggregate turnover and 6 digits above.
HSN or SAC: which one do I use?
Use HSN for anything you sell as goods and SAC for anything you do as a service. A mobile shop sells phones (HSN 8517) and also repairs them (a repair service with a SAC). A tailor who sells fabric uses HSN 5208 for the cloth and a SAC for the stitching. Keep separate item lines for goods and services so each carries its own code and rate.
A mixed or composite supply is taxed at the rate of the principal supply or the highest rate, depending on whether the parts are naturally bundled. That rule decides the rate; the invoice still shows the code of the supply you are taxing.
What changed for services in September 2025
Notification 15/2025-Central Tax (Rate) amended the services rate notification from 22 September 2025. Among other changes, courier and postal services under heading 9968 are at 9% CGST (18% total), and job work entries under heading 9988 were restated. Rates for services depend heavily on conditions such as whether input tax credit is allowed, so read the entry for your heading in full before setting a rate.
The 57th GST Council meeting on 8 October 2026 recommended further changes for some services, including delivery services through e-commerce operators. Check for the notification before applying a recommended rate.
Worked example
An Indore electronics shop with ₹1.2 crore turnover sells a television for ₹30,000 plus GST and charges ₹1,000 for wall mounting. The TV line shows HSN 8528 at 18%: ₹5,400 GST. Installation sold together with the TV is usually treated as part of a composite supply with the TV as the principal supply, so it is taxed at the TV's rate; if the shop bills installation as a separate, independent service, that line shows the installation SAC and the rate notified for it. The shop records both treatments in its item master so staff do not guess.
Do it automatically in FundRaksha Book
In FundRaksha Book you can create service items with a SAC code next to your goods with HSN codes, and the invoice and HSN summary handle both. The first 300 invoices are free.
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.