SAC Code for Coaching Centres, Tuition & Vocational Training: Your 2024 GST Guide

Planning to start a coaching centre in India? Or already running a successful tuition business? While you focus on providing quality education, navigating the complexities of GST compliance is equally crucial. For a broader overview, consider reading our guide on Starting a Startup in India: Legal and Tax Essentials. One of the first steps is identifying the correct Service Accounting Code (SAC). The right SAC code for coaching centres is fundamental for accurate invoicing and seamless GST return filing, yet it remains a common point of confusion for many entrepreneurs. This comprehensive guide will simplify the process, covering the specific codes, applicable GST rates, and common questions for educational service providers in India, ensuring your business stays compliant and focused on growth.

What are SAC Codes and Why Are They Essential for Your Business?

Understanding the framework of the Goods and Services Tax (GST) is incomplete without a firm grasp of Service Accounting Codes (SAC). These codes are not just administrative formalities; they are the backbone of service classification in India, directly impacting your tax liability, invoicing practices, and overall compliance health. For any business offering educational services, from a small home tuition to a large competitive exam institute, getting the SAC code right is the first step towards a hassle-free GST journey.

Decoding the Service Accounting Code (SAC)

The Service Accounting Code (SAC) is a systematic classification scheme developed by India’s service tax department to categorize all possible services. Under the GST regime, every service provider must use these codes to identify the services they offer. A SAC code is a 6-digit number where the first two digits are always ’99’, representing services. The next two digits represent the major nature of the service, and the final two digits describe the detailed nature of the service. For instance, the SAC code for coaching centres India is designed to specifically identify commercial training services, helping the government uniformly track, tax, and analyze the educational services sector across the country.

The Critical Role of Correct SAC Codes in GST Compliance

Choosing the correct SAC code is a non-negotiable aspect of GST compliance, and the consequences of getting it wrong can be significant. It’s much more than just a number on an invoice; it’s a declaration of your service nature to the tax authorities, which determines the tax rate you must charge. Here’s why accuracy is paramount:

• Incorrect GST Rate Calculation: The most immediate impact of using a wrong SAC code is the application of an incorrect GST rate. This could lead to either overcharging your students and paying excess tax to the government, or undercharging and facing a demand for the tax shortfall later, along with hefty interest.
• Departmental Audits and Scrutiny: Mismatches in SAC codes and the nature of your business are red flags for tax authorities. Such discrepancies can trigger departmental audits, leading to a time-consuming and stressful process of scrutiny where you have to justify your classifications and tax payments.
• Issuance of Show-Cause Notices and Penalties: If an audit reveals an underpayment of tax due to an incorrect SAC code, the GST department can issue a show-cause notice. This can result in penalties that can be as high as the tax amount itself, severely impacting your business’s financial health.
• Rejection of Input Tax Credit (ITC) for Your Clients: If you provide services to other GST-registered businesses (B2B), an incorrect SAC code on your invoice can cause them problems. Their claim for Input Tax Credit (ITC) on the GST you charged could be rejected, damaging your professional relationships and business reputation. For more details on this, refer to our article on Understanding Input Tax Credit Reversals and Their Role in GST Demand Notices.

The Definitive SAC Code for Coaching Centres & Tuition Services

For the vast majority of businesses providing academic or competitive exam coaching, the GST framework has a specific classification. It’s essential to pinpoint this exact code to ensure your invoices are correct and your tax filings are accurate from day one.

SAC Heading 9992: Education Services

The primary category under which most educational activities are classified is Heading 9992. This broad heading encompasses a wide range of services, from pre-primary schooling and higher education to specialized commercial training. When trying to find the right code, this is your starting point. The subsequent digits will narrow down the classification to your specific type of service.

The Primary Code – SAC 999293: Commercial training and coaching services

This is the key takeaway for most educational entrepreneurs. SAC 999293 is the specific code designated for “Commercial training and coaching services.” This is the primary SAC code for coaching centres and tuition businesses operating on a commercial basis. A clear tuition SAC code explanation is that if you are charging a fee for your teaching services, this code applies to you.

This code covers a wide array of services, including:

• Academic Tuitions: Coaching for all school subjects (e.g., Physics, Maths, Commerce) across all educational boards (CBSE, ICSE, State Boards).
• Competitive Exam Preparation: Institutes that prepare students for entrance exams like UPSC, Bank PO, SSC, IIT-JEE, NEET, CAT, CLAT, etc.
• Hobby Classes: Any hobby-related classes like music, dance, or art that are run as a commercial venture.
• Professional Course Coaching: Coaching for professional exams like CA, CS, and CMA.

Essentially, if your business’s core function is to provide supplementary education or training for a fee, SAC 999293 is the correct classification for all SAC code tuition centres India.

GST Rate and Invoice Details for SAC 999293

Once you’ve identified the correct SAC code, the next step is to apply the correct GST rate. For services classified under SAC 999293, the applicable GST rate is 18%.

This is broken down as follows:

• Intra-State Supply (within the same state): 9% CGST + 9% SGST
• Inter-State Supply (to a different state): 18% IGST

Here is a sample of how a line item should appear on your invoice:

Description	SAC Code	Taxable Value	CGST @9%	SGST @9%	Total Invoice Value
Monthly Fee for Class 12 Physics Coaching	999293	₹5,000	₹450	₹450	₹5,900

The Right SAC Code for Vocational Training India

While academic coaching has a clear classification, the GST framework also provides specific codes for skill-based and vocational training. It’s important to differentiate these services to maintain compliance, as they fall under a slightly different sub-category.

Understanding SAC 999294: Other commercial and training coaching services

This is a critical vocational training SAC code guide. SAC 999294 is designated for “Other commercial and training coaching services.” This code is intended for institutes that provide training focused on imparting specific job-oriented or practical skills, which are not purely academic. If your training helps individuals acquire a tangible skill for employment or self-employment, this code is likely the right fit.

Examples of services covered under SAC 999294 include:

• Computer Training Institutes: Courses on software development, hardware networking, digital marketing, data science, etc.
• Skill Development Courses: Training in personality development, public speaking, and corporate soft skills.
• Driving Schools: Professional instruction for operating vehicles.
• Culinary and Hospitality Training: Classes for cooking, baking, hotel management, and bartending.
• Beautician and Salon Training: Courses on cosmetology, hairstyling, and makeup artistry.

The GST rate for services under SAC 999294 is also 18% (9% CGST + 9% SGST or 18% IGST).

Specialised Training Codes: Sports and Recreation

For businesses operating in the fitness and sports education sector, there is an even more specific code. SAC 999662 is used for “Services related to sports and recreational education.” This ensures that such specialized training is classified distinctly from general academic or vocational training.

Examples include:

• Cricket, football, or other sports academies.
• Martial arts schools (Karate, Taekwondo).
• Yoga studios and meditation centres.
• Fitness training centres and gymnasiums providing instruction.

The applicable GST rate for these services is also 18%.

Are All Educational Services Taxable? Understanding GST Exemptions

A common misconception is that all forms of education are exempt from GST. While there are specific exemptions, they are narrowly defined and do not apply to the majority of private coaching and training centres. Understanding this distinction is crucial to avoid non-compliance.

What the Law Says: GST Exemption for “Educational Institutions”

According to Notification No. 12/2017- Central Tax (Rate), services provided by an “educational institution” to its students, faculty, and staff are exempt from GST. This exemption is the source of most confusion. The key to this rule lies in the GST law’s specific definition of an “educational institution.” For the most up-to-date information and official circulars, you should always refer to the CBIC website.

Crucial Distinction: Why Most Coaching Centres are NOT Exempt

The GST exemption is not a blanket cover for all teaching activities. To qualify as an “educational institution” for GST exemption purposes, an entity must provide education as part of a curriculum for obtaining a qualification recognized by any law in force in India.

The law defines an “educational institution” as an institution providing:

1. Pre-school education and education up to higher secondary school or equivalent.
2. Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force.
3. Education as a part of an approved vocational education course.

Here is the critical clarification: Private coaching centres, tuition classes, and competitive exam institutes do not issue a degree, diploma, or certificate that is legally recognized (like a B.Com degree from a university or a Class 12 certificate from CBSE). They merely provide supplementary education or preparation for exams. Since their “qualification” is not recognized by law, they do not qualify as an “educational institution” under the GST definition. Therefore, their services are taxable under SAC 999293 at 18% GST and are not exempt.

Putting It Into Practice: A Step-by-Step Guide

Knowing the theory is one thing, but implementing it correctly in your business operations is what ensures compliance. Here’s a simple, step-by-step guide to follow.

Step 1: Accurately Identify Your Service

Before you do anything else, take a moment to analyze the core nature of your business. Ask yourself what you are primarily offering.

• Are you providing academic tuition or preparing students for competitive exams? Your code is 999293.
• Are you offering skill-based courses like computer programming, digital marketing, or baking? Your code is 999294.
• Are you running a sports academy or a yoga studio? Your code is 999662.

This initial self-assessment is the foundation for correct GST compliance.

Step 2: Update Your GST Registration Certificate

Once you are clear on your primary service, you must ensure it is correctly reflected in your GST registration. Log in to the GST Portal and check your registration certificate. If the SAC code listed under your “Nature of Business” is incorrect or outdated, you should file for an amendment of your core business field immediately. Having the correct code on your official registration documents is crucial during any departmental review.

Step 3: Implement Correct Invoicing

Every invoice you issue must be GST-compliant. This means it must clearly mention the correct SAC code for the service provided and show the proper breakdown of GST. Reiterate the details on every single invoice: the description of the service, the applicable SAC code, the taxable value, and the corresponding CGST/SGST or IGST amounts. This not only ensures your own compliance but also allows your B2B clients to claim Input Tax Credit without any issues.

Conclusion

Navigating the GST landscape can seem daunting, but understanding the fundamentals like the Service Accounting Code simplifies the process significantly. For educational entrepreneurs, the key is to remember that the primary SAC code for coaching centres and academic tuition is 999293, while vocational and skill-based training typically falls under 999294. Almost all these services attract a standard GST rate of 18%, and it’s crucial to recognize that private coaching centres are generally not exempt from GST.

Using the correct SAC code is not just a regulatory requirement; it is a cornerstone of good business practice that protects you from future financial and legal complications. It ensures accurate tax payment, builds trust with your clients, and keeps your business in good standing with the tax authorities.

Navigating GST rules can be challenging. If you need help with GST registration, filing, or expert advice on your coaching centres SAC code details, TaxRobo’s team of experts is here to assist. Contact Us Today for an Online CA Consultation.

Frequently Asked Questions (FAQs)

1. What is the SAC code for online tuition classes in India?

The SAC code remains the same, 999293. The nature of the service is “commercial training and coaching,” and the medium of delivery (online or offline) does not change this fundamental classification. The GST rate and compliance requirements are identical for both online and in-person coaching.

2. Is GST registration mandatory for a small home-based tuition centre?

GST registration is mandatory for any service provider whose aggregate annual turnover exceeds the threshold limit. For most states in India, this limit is ₹20 lakhs. For special category states (like those in the North-East), the limit is ₹10 lakhs. If your total annual revenue from tuition fees is below this threshold, GST registration is optional. However, if your turnover crosses the limit, you must register for GST. You can find more details in our Ultimate Guide to GST Registration for Small Businesses.

3. I teach both school subjects and a vocational computer course. Which SAC code should I use?

In such a scenario, you should ideally identify your primary source of revenue. If over 50% of your income comes from academic tuition, you can use 999293 as your primary business code. However, the best practice for absolute compliance is to raise separate invoices for different services. You can issue invoices with SAC code 999293 for school tuitions and invoices with SAC code 999294 for the vocational computer course. This provides clear documentation of your diverse service offerings.

4. What is the penalty for using an incorrect SAC code?

Using an incorrect SAC code often leads to charging the wrong GST rate. If this results in an underpayment of tax, you will be liable to pay the tax shortfall along with interest (currently 18% per annum). Furthermore, the GST authorities can impose a penalty for tax evasion or incorrect filing, which can be as high as 100% of the tax amount due. It can also lead to prolonged scrutiny and audits.

5. Where can I find the official list of all SAC codes?

The most reliable and official source for the complete, updated list of SAC codes is the Central Board of Indirect Taxes and Customs (CBIC) website. You can also access the full list and a search functionality in the ‘Services’ tab on the official GST Portal after logging in. It is always advisable to refer to these official government sources rather than unverified third-party websites.