SAC Code for Courier, Shipping & Warehousing Services in India: A Complete Guide

You’ve just closed a sale and need to ship the product to your customer. But when creating the GST invoice, you’re stuck. What is the correct SAC code for the courier service you’re using? This is a common hurdle for small business owners across India, and getting it wrong can lead to compliance issues. Understanding the right SAC code for courier, shipping & warehousing is not just about filling a box on an invoice; it’s about ensuring accurate tax calculation, smooth operations, and maintaining trust with your clients. A Services Accounting Code, or SAC, is a unique code assigned under the GST regime to classify every type of service. This guide will simplify the entire process by providing a clear and comprehensive breakdown of the specific SAC codes for all your logistics needs, helping you stay compliant and manage your business without a single hiccup.

What is a SAC Code and Why is it Crucial for Your Business?

For any business dealing with services, understanding the SAC code framework is as fundamental as knowing your product’s price. It’s the language the GST system uses to identify and tax the services you provide or receive, making it an indispensable tool for compliance. Ignoring its importance can lead to significant operational and financial challenges, from incorrect tax payments to disputes with the tax authorities. Therefore, mastering the application of these codes, especially in a complex field like logistics, is a non-negotiable aspect of running a successful and legally sound business in India. This is especially true when dealing with the integrated supply chains that involve courier, shipping, and warehousing functions, each with its own distinct classification.

The Meaning of SAC Code in Logistics India

In the simplest terms, a SAC code is a 6-digit classification system developed by the service tax department to uniformly categorize services under the Goods and Services Tax (GST) law. It functions for services in the same way the HSN (Harmonized System of Nomenclature) code works for goods. The first two digits (’99’) are standard for all services, while the next two digits represent the major nature of the service, and the final two digits describe the detailed nature of the service. The primary purpose of understanding the meaning of SAC code in logistics India is to achieve clarity and uniformity in the taxation process. It helps the government track service transactions across the economy and enables businesses to determine the correct GST rate applicable to their services, which is crucial for accurate invoicing and simplified filing of GST returns like GSTR-1 and GSTR-3B. For a complete overview, see our guide on How to File GST Returns Online: A Step-by-Step Guide of the GST Filing Process & Procedure.

The Impact of Using the Correct SAC Code

Using the correct SAC code is not merely a procedural formality; it has a direct and significant impact on your business’s financial health and legal standing. Getting this right from the outset prevents a cascade of potential problems down the line. It builds a foundation of trust and transparency with your business partners and ensures you remain in good standing with tax authorities.

Correct Invoicing: Mentioning the right SAC code on your invoices is a legal requirement under GST, especially for B2B transactions. It ensures your invoices are fully compliant and professional. You can learn more by reading our Understanding GST Invoicing: A Detailed Guide.
Accurate Tax Payment: Each SAC code is linked to a specific GST rate. Using the correct code guarantees you charge the right amount of tax to your customers and remit the correct amount to the government, preventing overpayment or underpayment scenarios.
Seamless Input Tax Credit (ITC): When you issue a correct B2B invoice with the right SAC code, your customer can claim their Input Tax Credit without any friction. An incorrect code can lead to discrepancies and cause their ITC claims to be rejected, damaging your business relationship.
Avoiding Penalties: The GST department can levy significant penalties for non-compliance. Consistently using the wrong SAC code can be viewed as a willful misstatement, leading to tax demand notices, interest on short-paid tax, and other legal consequences.

Complete List of SAC Codes for Courier, Shipping & Warehousing

Navigating the world of logistics involves various distinct services, and each has its own specific SAC code under the GST framework. To ensure your invoices are always accurate, it’s essential to differentiate between courier, shipping (Goods Transport Agency), and warehousing services. Using a general code when a specific one is available is a common mistake that can lead to compliance issues. Below is a detailed breakdown of the primary SAC code for courier, shipping & warehousing services, along with their applicable GST rates and specific use cases.

For a quick overview, here are the key codes:

Service Type	SAC Code	Applicable GST Rate(s)	Key Point
Courier Services	996812	18%	For door-to-door parcel/document delivery.
Shipping Services (GTA)	996791	5% (RCM) or 12% (Forward Charge)	For transport of goods by road via a GTA.
Warehousing Services	996711	18%	For storage of general goods and inventory.

SAC Code for Courier Services in India

Primary SAC Code: 996812 – Courier Services
Services Covered: This is the most common code used by businesses for their day-to-day shipping needs. It covers all services involving the door-to-door transportation of time-sensitive documents, parcels, packages, and other light goods. This classification applies to services offered by both national courier companies like Blue Dart, DTDC, and Delhivery, as well as local or hyper-local delivery partners. If the service involves picking up an item from your location and delivering it to the recipient’s doorstep, this is almost always the correct code to use.
Applicable GST Rate: The standard GST rate for services under SAC 996812 is 18%.
Example: Your e-commerce business sells handcrafted goods. When you ship an order to a customer in another state using a third-party courier aggregator, the invoice you issue to your customer for shipping charges (if billed separately) or the invoice you receive from the courier company should correctly mention the SAC code for courier services India, which is 996812, with an 18% GST levy.

SAC Code for Shipping Services in India (Goods Transport Agency – GTA)

Primary SAC Code: 996791 – Goods Transport Services by Road
Services Covered: This SAC code is specifically for the transportation of goods by road when provided by a Goods Transport Agency (GTA). A GTA is defined as any person who provides service in relation to the transport of goods by road and issues a consignment note. For such movements, it’s also important to follow e-way bill rules, which are detailed in our Guide to GST E-Way Bill Generation. This typically involves larger shipments, freight, and bulk transport, as opposed to smaller parcels handled by couriers. It’s the correct SAC code for shipping services India when dealing with transporters and logistics companies for moving your raw materials or finished products.
Applicable GST Rates & Rules: This is where things get slightly complex. A GTA has two options for charging GST:
- 5% GST (without ITC): Under this option, the GTA does not charge GST on its invoice. Instead, the liability to pay the 5% GST falls on the recipient of the service under the Reverse Charge Mechanism (RCM). The GTA cannot claim Input Tax Credit on goods and services used to provide this transport service.
- 12% GST (with ITC): The GTA can choose to pay GST themselves under the forward charge mechanism. In this case, they will charge 12% GST on their invoice and are eligible to claim Input Tax Credit on their expenses like trucks, fuel, and maintenance.
Actionable Tip: As a small business receiving GTA services, you must check the transporter’s invoice. If they haven’t charged GST, it’s highly likely that RCM at 5% is applicable, and you are responsible for paying that tax directly to the government. Always confirm with your GTA which tax option they have chosen to avoid confusion.

SAC Code for Warehousing Services in India

Primary SAC Code: 996711 – Warehousing and Storage Services of General Merchandise
Services Covered: If your business requires space to store inventory, raw materials, or finished goods before they are sold or shipped, you are using warehousing services. This SAC code covers the rental of storage space in a warehouse, godown, or any other storage facility. It includes both general warehousing for dry goods and specialized storage like cold storage facilities for perishable items. Essentially, any service that primarily involves holding and storing goods for a fee falls under this classification.
Applicable GST Rate: The GST rate for services falling under the SAC code for warehousing services India (996711) is 18%.
Example: Your business imports goods and needs to store them in a secure facility near a major port before distributing them to retailers. The monthly invoice you receive from the warehouse operator for the storage rental and handling charges will use the SAC code 996711 and will have an 18% GST charge.

How to Correctly Apply SAC Codes on Your GST Invoices

Knowing the codes is only half the battle; applying them correctly on every single invoice is what ensures compliance. A small error in this process can create reconciliation headaches for you and your clients. By following a systematic approach, you can ensure accuracy and professionalism in all your financial documentation, making the entire GST process smoother and more efficient.

A Practical Step-by-Step Guide

Identify the Service: Before creating an invoice, clearly determine the exact nature of the service you are billing for. Is it a door-to-door parcel delivery (Courier), bulk goods transport by road (GTA), or storage of inventory (Warehousing)?
Find the Correct SAC: Refer to the list above and match the service to its specific 6-digit SAC code. For example, use 996812 for a courier charge.
Mention on Invoice: All GST-compliant tax invoices have a designated column for HSN/SAC codes. Ensure you enter the correct 6-digit code clearly in this section for each service listed.
Apply Correct GST Rate: Based on the SAC code, apply the corresponding GST rate. For courier services (996812), this would be 18%. Remember to split the tax correctly into CGST and SGST for sales within the same state (intra-state) or apply the full rate as IGST for sales to a different state (inter-state).

Common Mistakes to Avoid

Using a Vague Code: Avoid using general or miscellaneous service codes when a specific code like 996812 for couriers exists. Specificity is key to GST compliance.
Incorrect GST Rate Application: The most critical error is mismatching the code with the rate. For instance, applying 18% GST on a GTA service that falls under the 5% RCM category can lead to significant tax issues.
Omitting the Code Entirely: Forgetting to mention the SAC code, especially on B2B invoices, is a major compliance failure. It directly prevents your business customer from claiming their rightful Input Tax Credit and can lead to disputes.

Conclusion

Mastering the correct SAC code for courier, shipping & warehousing is a non-negotiable part of GST compliance for any business involved in the movement and storage of goods. By correctly identifying and applying codes like 996812 for Courier Services, 996791 for Goods Transport Agency (GTA) services, and 996711 for Warehousing, you ensure accurate tax payments, create legally sound invoices, and enable a smooth flow of Input Tax Credit for your clients. This attention to detail not only keeps you safe from potential penalties but also reinforces your reputation as a professional and reliable business partner in a competitive market.

Navigating GST codes can be complex. Don’t let compliance errors slow your business down. TaxRobo’s GST experts can handle your filings, invoicing, and compliance, ensuring accuracy every step of the way. Contact Us Today for a Free Consultation!

Frequently Asked Questions (FAQs)

1. What is the difference between an HSN code and a SAC code?

HSN (Harmonized System of Nomenclature) codes are an internationally recognized system for classifying physical goods. They are typically 8 digits long in India. On the other hand, SAC (Services Accounting Code) codes are a domestic classification system used specifically to identify and classify services under the GST regime. All SAC codes start with the number 99.

2. Do I need to mention the SAC code on all invoices?

It is mandatory to mention the SAC code on all B2B (Business-to-Business) tax invoices. For B2C (Business-to-Consumer) invoices, businesses with an annual aggregate turnover below ₹5 crore are exempt from mentioning SAC codes. However, it is considered a best practice to include them on all invoices for consistency, clarity, and to be prepared for any future changes in regulations.

3. What happens if I use the wrong SAC code for courier shipping warehousing services?

Using an incorrect SAC code can lead to several negative consequences. The most immediate issue is charging the wrong GST rate, which could result in a tax demand notice, interest, and penalties from the GST department. Furthermore, if you issue a B2B invoice with the wrong code, your customer may face difficulties or rejection when trying to claim their Input Tax Credit (ITC), which can damage your professional relationship.

4. Where can I find the official and complete list of SAC codes?

The most reliable and up-to-date source for the complete list of SAC codes and their corresponding GST rates is the official website of the Central Board of Indirect Taxes and Customs (CBIC). You can refer to their dedicated GST section to find the latest notifications and schedules of rates. CBIC GST Rates Page

SAC Code Courier Shipping Warehousing: Find Yours Now!