SAC stands for Services Accounting Code. It is the classification system used for services under GST, in the same role that HSN plays for goods.
If you supply consultancy, transport, software development, repairs or any other service, the SAC is what identifies that service on your invoice and in your returns.
The structure
A SAC is six digits, and it narrows from left to right:
- First two digits — 99. Effectively the marker for services. Almost every SAC begins with these.
- Next two digits — the major service group. Broad families such as construction, transport, financial services, professional services.
- Final two digits — the specific service. The particular service within that group.
That fixed 99 prefix is genuinely useful: if you see a six-digit code on an invoice starting with 99, you are looking at a service classification, not a product.
How SAC differs from HSN
- SAC covers services; HSN covers goods.
- SAC is an Indian classification; HSN is international.
- SAC is six digits; HSN runs from two to eight.
- SAC begins with 99; HSN does not.
Both feed the same purpose — determining the applicable rate and reporting consistently.
Choosing the right SAC
Services are harder to classify than goods, because what you supply is defined by what you do rather than by what you hand over. A few principles help:
Classify the substance of the service. What is the customer actually paying for? A training company that also sells a manual is supplying training, not books.
Use the major group first. Identify the broad family, then narrow. It is easier to get the middle two digits right and then choose among a handful of options than to search the whole list.
Be careful with bundles. If you supply several things together, the composite and mixed supply rules decide how to treat the bundle. A single invoice line may not be right.
Check whether it is a service at all. Some arrangements that feel like services are treated as supplies of goods, and vice versa. Works contracts and software supplies are perennial examples.
Stay consistent. Use the same SAC for the same service every time.
Where SAC appears
- On tax invoices for services, against each line.
- In GST returns, in classification summaries.
- In rate notifications, which are organised by code.
How many digits to show
As with HSN, the reporting requirement depends on turnover, and has been revised over time. SAC is six digits in any case, so in practice the question is whether you must report four or six.
A note on exemptions
A number of services are exempt or attract a nil rate. Exemption does not remove the need to classify — you still identify the service, you simply apply the notified treatment. If you believe a service is exempt, cite the basis rather than leaving the field blank.
Where to go next
- Read what is an HSN code.
- Read HSN and SAC codes explained.
- Read how to calculate GST.
- Look up a code with SAC code search.
Classification and rates change. Confirm against CBIC before relying on a code for filing.