A Complete Guide to the SAC Code for Advertising, Digital Marketing & SEO Services

As a digital marketing agency owner or a freelance SEO expert in India, creating a GST-compliant invoice can be confusing. The biggest question? ‘What is the correct SAC code for advertising for my services?’ Using the right code is not just a formality; it’s a legal requirement for Goods and Services Tax (GST) compliance. For a new business, this starts with understanding the basics, as detailed in our guide, Launching Your Startup Right – Mastering GST Registration in India. Getting it wrong can lead to invoicing errors, delayed payments, and potential penalties from the tax authorities. This guide will simplify the process by providing the correct SAC code for advertising and its related digital services. We will break down the specific codes for digital marketing, SEO, and other promotional activities to ensure your business stays compliant and your invoicing is always accurate.

What Are SAC Codes and Why Do They Matter for Your Business?

Before diving into the specific codes for marketing, it’s essential to understand what SAC codes are and the crucial role they play in the GST framework. Many business owners overlook this detail, but getting it right from the start can save you significant trouble down the road.

Understanding the Services Accounting Code (SAC)

The Services Accounting Code (SAC) is a uniform classification system developed by India’s Service Tax department to categorize all types of services. Under the GST regime, it helps in identifying, classifying, measuring, and levying the appropriate tax on services.

Every SAC is a 6-digit number. The structure is simple:

The first two digits (99) are standard for all services.
The next two digits (83 in our case) represent the major heading of the service, like “Other professional, technical and business services.”
The final two digits (63 in our case) specify the detailed nature of the service, such as “Other advertising services.”

It’s important not to confuse SAC codes with HSN (Harmonized System of Nomenclature) codes. While they serve a similar purpose, HSN codes are used exclusively for goods, whereas SAC codes are used exclusively for services.

The Critical Role of SAC Codes in GST Compliance

For any GST-registered business, using the correct SAC code is non-negotiable. These codes are the backbone of the GST system for services, and their accuracy impacts several aspects of your business operations.

Here’s why they are so important:

Determining the Correct GST Rate: The SAC code directly links your service to its applicable GST rate (e.g., 5%, 12%, 18%, or 28%). Using the wrong code could mean charging the wrong tax amount.
Filing Accurate GST Returns: Your SAC code must be mentioned when filing your GSTR-1 (statement of outward supplies). Correct codes ensure your returns are accurate and reduce the chances of a mismatch notice from the GST department. To learn more about this process, see our guide on How to File GST Returns Online: A Step-by-Step Guide of the GST Filing Process & Procedure.
Claiming Input Tax Credit (ITC): Your clients need the correct SAC code on your invoice to claim their Input Tax Credit. An incorrect code can lead to their ITC claim being rejected, potentially damaging your business relationship.

In short, using the correct SAC classification for advertising services is a fundamental legal requirement that ensures transparency and smooth compliance for your business.

The Main SAC Code for Advertising and Marketing Services

Now that we understand the ‘why’, let’s get to the ‘what’. The GST framework has a specific category for business services, which is where advertising and marketing activities are classified.

Heading 9983: The Primary Category for Business Services

Almost all professional, technical, and business services that are not specified elsewhere fall under the main chapter heading 9983. This is a broad category that includes services like management consulting, legal services, accounting, and, most importantly for our discussion, advertising and marketing services. Think of it as the main library section for all business-related services.

Pinpointing the Correct SAC Code: Heading 99836

Within the broad category of 9983, the government has created a specific sub-heading for advertising services. The primary heading for all advertising and market research services is 99836. Any service you provide that is directly related to advertising will fall under one of the codes within this group.

Here is a breakdown of the specific codes under this heading:

998361 – Sale of advertising space or time (except on commission): This code is for businesses that directly own and sell advertising space. For example, a newspaper selling a print ad spot, a TV channel selling a 10-second commercial slot, or a website owner selling banner ad space directly to a client would use this code.
998362 – Sale of advertising space or time on commission: This code is used by agencies or intermediaries who sell advertising space on behalf of media owners and earn a commission. They are acting as a middleman between the advertiser and the media platform.
998363 – Other advertising services: This is the most important and widely used code for modern marketing businesses. It acts as a catch-all category for all other advertising-related services that don’t involve the direct sale of space or time.

The Go-To SAC Code for Digital Marketing in India: 998363

For the vast majority of digital marketing agencies, consultants, and freelancers, the correct code to use is 998363. This code, titled “Other advertising services,” covers the creation and execution of marketing strategies. If your business provides services designed to promote a client’s brand, product, or service, this is almost certainly the right code for you.

The SAC code for digital marketing in India under 998363 encompasses a wide range of activities, including:

Social Media Management (SMM) and Marketing
Content Marketing (blog writing, video creation, etc.)
Email Marketing Campaigns
Pay-Per-Click (PPC) Management (e.g., Google Ads, Facebook Ads)
Online Reputation Management (ORM)
Influencer Marketing Coordination
Marketing Strategy and Consulting

Essentially, any service where you are paid for your expertise, creativity, and management of advertising campaigns falls under this digital marketing SAC code India.

Finding the SAC Code for SEO Services in India: 998363

Search Engine Optimization (SEO) is a specialized form of digital marketing. Its goal is to increase a client’s visibility on search engines like Google. Since SEO is a promotional service aimed at driving organic traffic and brand awareness, it also falls squarely under the same SAC code.

The correct SAC code SEO services in India is 998363 – Other advertising services.

This includes all related SEO activities such as:

On-page and Off-page SEO
Technical SEO Audits
Keyword Research and Strategy
Link Building Services
Local SEO Services
Content Optimization for Search Engines

Whether you offer a comprehensive SEO package or specialized services, you should use the SEO services SAC code India 998363 on your invoices.

Practical Application: GST Rates and Invoicing

Knowing the correct SAC code is only half the battle. You also need to apply the right GST rate and mention it correctly on your invoices to ensure full compliance.

What is the GST Rate for Advertising and Digital Marketing?

The GST rate for services is determined by their SAC code. For all services falling under the heading 99836 (including 998361, 998362, and 998363), the applicable GST rate is 18%.

This is broken down as follows:

For intrastate transactions (service provider and client are in the same state): 9% CGST + 9% SGST.
For interstate transactions (service provider and client are in different states): 18% IGST.

Actionable Tip: GST rates are subject to change based on government notifications. While 18% is the current rate, it’s always a good practice to verify the latest rates on the official CBIC website. You can find the latest notifications on the CBIC (Central Board of Indirect Taxes and Customs) website.

How to Correctly Mention the SAC Code on Your Invoice

Your GST invoice must be clear and contain all the mandatory details. For a complete overview, check out our Understanding GST Invoicing: A Detailed Guide. Here’s a sample line item to show how you should present your services:

Description of Service	SAC Code	Taxable Value	CGST @ 9%	SGST @ 9%	Total
Comprehensive Digital Marketing & SEO Services for Nov 2023	998363	₹50,000	₹4,500	₹4,500	₹59,000

This clear format helps your client understand the charges and makes it easy for them to claim Input Tax Credit without any issues.

Common Mistakes to Avoid

Even with the right information, simple mistakes can cause compliance headaches. Here are a few common errors to watch out for:

Using a Goods (HSN) Code: A frequent mistake is using an HSN code for a service. Always remember: SAC is for services, HSN is for goods.
Being Too Vague: Avoid using a general code from Chapter 99 if a more specific one (like 998363) is available. Specificity is key to correct classification.
Not Updating Your System: If the government changes a code or a rate, ensure your invoicing and accounting software is updated immediately to reflect the change.

Conclusion

For anyone in the marketing and advertising industry in India, understanding SAC codes is fundamental to running a compliant business. To summarize, the primary SAC code for advertising, digital marketing, and SEO services is 998363, which falls under the main heading 99836. This code is associated with an 18% GST rate.

Using the correct code on your invoices ensures accurate tax payment, helps your clients claim ITC seamlessly, and keeps your financial records clean. It’s a small detail that has a big impact on your business’s legal and financial health. Staying compliant with GST regulations is not just about avoiding penalties; it’s about building a professional, trustworthy, and sustainable business.

Navigating GST and SAC codes can be complex. If you need expert assistance with GST registration, filing, or accounting for your marketing business, TaxRobo is here to help. Contact our experts today for a hassle-free compliance experience!

Frequently Asked Questions (FAQs)

1. Is there a different SAC code for social media marketing services?

No, social media marketing is considered a modern advertising service. It falls under the Indian SAC code for digital marketing, which is 998363 – “Other advertising services.” This code covers all promotional activities conducted on social media platforms.

2. What happens if I use the wrong SAC code on an invoice?

Using an incorrect SAC code can lead to several problems. It may result in you charging the wrong GST rate, which can lead to mismatches during GST return filing. This could trigger scrutiny or notices from the GST department. Furthermore, it can cause issues for your client when they try to claim Input Tax Credit (ITC), as the service description may not match the code provided.

3. Do I need to mention a 4-digit or 6-digit SAC code?

While the minimum requirement for mentioning digits can depend on your annual turnover, it is always a best practice to use the most specific code available. For advertising services, this means using the full 6-digit code, 998363, for maximum clarity, accuracy, and compliance.

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

The most reliable and up-to-date source for all SAC codes and their corresponding GST rates is the official government portal. You can check the website of the Central Board of Indirect Taxes and Customs (CBIC) for the latest circulars, notifications, and code lists.

SAC Code for Advertising: What You Need to Know