GST Rate for IT Services

SAC Code and GST Rate for IT Services

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SAC Code and GST Rate for IT Services

GST rate for Goods and Services is decided by the GST Council in India. GST rate for IT services is based on the SAC code, a services classification system devised by the service tax department in India. All services supplied in India are taxed under the five slabs of 0%, 5%, 12%, 18% and 28%. On the other hand, goods are taxed based on HSN code, a goods classification system internationally adopted by over 200 countries in the course of import and export. Goods are taxed under seven slabs namely, 0%, 0.25%, 3%, 5%, 12%, 18% and 28%. In this article, we look at the GST rate for IT services in detail.

GST Registration for IT Service Providers

GST registration would be required for most IT service providers as they could be involved in providing inter-state supply of services or OIDAR services. Under GST Act, GST registration is mandatory for any person who provide taxable services of more than Rs.20 lakhs per annum (In all states, except for Special Category States) or involved in inter-state supply of goods and/or services or providing OIDAR services or online services. (Know more about GST Registration in India).

SAC Code for IT Service Providers

The services provided by IT service providers could fall under various headings of the SAC code. The following are some of the relevant headings under SAC code for IT service providers:

Information Technology Services

SAC Code 998311 – Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management.
SAC Code 998312 – Business consulting services including pubic relations services
SAC Code 998313 – Information technology (IT) consulting and support services
SAC Code 998314 – Information technology (IT) design and development services
SAC Code 998315 – Hosting and information technology (IT) infrastructure provisioning services
SAC Code 998316 – IT infrastructure and network management services
SAC Code 998319 – Other information technology services

Internet Telecommunications Services

SAC Code 998431 – On-line text based information such as online books, newpapers, periodicals, directories etc
SAC Code 998432 – On-line audio content
SAC Code 998433 – On-line video content
SAC Code 998434 – Software downloads
SAC Code 998439 – Other on-line contents

Maintenance, Repair and Installation Services

SAC Code 998712 – Maintenance and repair services of office and accounting machinery
SAC Code 998713 – Maintenance and repair services of computers and peripheral equipment
SAC Code 998716 – Maintenance and repair services of telecommunication equipments and apparatus
SAC Code 998733 – Installation services of office and accounting machinery and computers
SAC Code 998734 – Installation services of radio, television and communications equipment and apparatus.

Other Types of IT Services

SAC Code 998144 – Research and development originals in computer related sciences
SAC Code 998593 – Telephone-based support services
SAC Code 998598 – Other information services n.e.c.

GST Rate for IT Service Providers

IT services attract 18% GST under the default GST rate for services.

Know more about GST through the IndiaFilings GST Portal or file GST returns using LEDGERS GST Accounting Software.

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