SAC Code for Construction, Architect & Interior Design Services in India

For businesses operating in India’s booming construction and design industries, staying on top of Goods and Services Tax (GST) compliance is not just good practice—it’s essential for survival and growth. A critical component of this compliance is the correct use of the Services Accounting Code (SAC). Understanding and applying the right SAC code for construction, architectural work, or interior design is fundamental to creating accurate invoices, filing GST returns correctly, and avoiding unnecessary penalties. This guide breaks down everything you need to know about the SAC code construction architect design services, ensuring your business remains compliant and efficient. Whether you are a seasoned contractor or a budding designer, mastering these codes is a crucial step towards seamless financial management.

What is a SAC Code and Why is it Important?

Before diving into specific codes, it’s important to understand the basics. The Services Accounting Code, or SAC, is a uniform classification system developed by the service tax department for identifying and taxing services in India. Under the GST regime, every service provided by a business must be categorized under a specific SAC code. This system helps the government track services, measure economic activity, and apply the correct GST rate consistently across the country. It is the service equivalent of the HSN (Harmonized System of Nomenclature) Code, which is used to classify goods. While both systems aim to systematize tax collection, HSN codes are for physical products, whereas SAC codes are exclusively for services. For a detailed breakdown, refer to our HSN & SAC Code Complete Guide – Choosing the Correct Code for GST.

The structure of a SAC code is straightforward. It is a 6-digit code where the first two digits (99) are common for all services. The next two digits represent the major nature of the service, and the final two digits describe the detailed nature of the service. Using the correct code is non-negotiable. An incorrect SAC classification for construction and design India on your invoice can lead to a cascade of problems. It can result in charging the wrong GST rate, which could lead to over or under-payment of taxes. Such discrepancies can trigger a GST notice from the tax authorities, leading to scrutiny, potential interest charges, and penalties. For a small business owner, these complications can be a significant drain on time and resources, making it vital to get it right from the start.

Understanding the SAC Code for Construction Services

The entire spectrum of construction-related services is broadly classified under the major heading 9954. This is the starting point for anyone providing construction services in the country. However, this main heading is further broken down into several sub-categories to precisely identify the nature of the work being performed. Choosing the correct sub-category ensures that you apply the right GST rate and maintain clear, compliant records. This is particularly crucial as different types of construction projects, such as affordable housing, may have concessional GST rates. For anyone in this sector, understanding the nuances of the SAC code for construction is the first step towards flawless GST compliance. In addition to service codes, understanding the GST Rate & HSN Code for Building Contractors and Developers is equally important for handling goods and materials. Let’s explore the most common codes under this heading.

99541: General Construction Services of Buildings

This is one of the most frequently used codes within the construction sector. SAC 99541 specifically covers the general construction services for all types of buildings, both residential and commercial. It encompasses the entire process of building from the ground up, including additions, alterations, and repairs. If your business is involved in building homes, apartments, offices, or factories, this is the primary code you will be using on your invoices.

• Examples:
  • Construction of single-family homes or multi-storied residential apartments.
  • Building of office complexes, shopping malls, and other commercial structures.
  • Construction of industrial buildings like warehouses, manufacturing plants, and workshops.
  • Building schools, hospitals, and other public or institutional buildings.

The GST rate for services under this code is typically 18%. However, it’s important to note that specific schemes, such as those for affordable housing, may have different rates. Always advise your clients and check the official GST Portal for the latest and most accurate rates applicable to your specific project. Accurate classification helps in availing input tax credit correctly, making the entire process smoother. For detailed guidance on SAC code for construction services India, professional help can be invaluable.

99542: General Construction Services of Civil Engineering Works

While the previous code deals with buildings, SAC 99542 is designated for large-scale civil engineering and infrastructure projects. These are the projects that form the backbone of a nation’s infrastructure, including transportation networks, water management systems, and industrial complexes. Companies engaged in government tenders or large private infrastructure contracts will primarily use this code for their services. These projects are often long-term and involve complex billing cycles, making correct SAC code usage even more critical for transparent accounting and tax filing.

• Examples:
  • Construction of highways, streets, roads, and airport runways.
  • Building bridges, tunnels, and railway lines.
  • Construction of dams, irrigation canals, and water supply pipelines.
  • Development of ports, harbours, and other water-related works.

The standard GST rate applicable to most services under this category is 18%. Given the scale and complexity of civil engineering projects, ensuring compliance from day one is essential to avoid any disputes with tax authorities down the line.

99543: Site Preparation Services

Before any construction can begin, the site needs to be prepared. SAC 99543 covers all the preliminary services that make a piece of land ready for a construction project. These services are often provided by specialized contractors as a standalone service or as the first phase of a larger construction contract. This includes clearing the land, preparing the ground, and conducting necessary tests to ensure the site is suitable for the planned structure.

• Examples:
  • Demolition services: Tearing down existing structures.
  • Excavation and earthmoving services: Digging foundations or levelling the ground.
  • Test drilling and boring services: To analyze the soil and geological conditions.
  • Land reclamation and site clearance services.

The GST rate for site preparation services is generally 18%. For contractors who specialize in this niche, using this specific code is important to distinguish their work from general construction.

99546: Installation and Assembly Services

This SAC code is for services related to the installation of various systems and fixtures within a building. It’s not about constructing the building itself, but about making it functional and habitable. This category is crucial for electricians, plumbers, HVAC technicians, and other specialized tradespeople who are often subcontracted during a larger construction project. Using SAC 99546 helps them classify their specific contribution to the project accurately.

• Examples:
  • Installation of electrical wiring, meters, and fixtures.
  • Plumbing installation for water supply and drainage.
  • Installation of heating, ventilation, and air-conditioning (HVAC) systems.
  • Installation of elevators, escalators, and fire protection systems.

Like other specialized construction services, the applicable GST rate is typically 18%. If your business needs assistance with managing GST filings for these specific services, TaxRobo offers expert GST Filing Services to ensure you remain compliant.

Finding the Right SAC Code for Architect and Interior Design Services

Beyond the physical construction, the planning and design phases are critical components of any project. Architects and interior designers provide essential professional services that have their own distinct SAC codes under the major heading 9983 (Other professional, technical and business services). It’s a common mistake for these professionals to misclassify their services under the construction heading (9954), which can lead to compliance issues. Using the correct code reflects the professional nature of the service and ensures the correct GST treatment.

SAC Code for Architect Services: 998341

Architects provide the blueprint for a project, blending art, science, and engineering. Their services are highly specialized and are classified under SAC 998341. This code is specifically for “Architectural advisory and technical consultancy services.” It covers the entire range of services an architect offers, from initial concept design to final project supervision.

• Examples:
  • Building design services: Creating blueprints and construction drawings for residential, commercial, or industrial buildings.
  • Urban and land planning services: Designing layouts for townships or large-scale developments.
  • Landscape architectural services: Designing outdoor spaces like parks, gardens, and public squares.
  • Architectural supervision and inspection services: Ensuring the construction adheres to the design plans.

The SAC code for architect services India (998341) attracts a standard GST rate of 18%, which is applicable to most professional services.

SAC Code for Interior Design Services: 998345

While an architect designs the structure, an interior designer makes the internal spaces functional, safe, and beautiful. These services are classified under SAC 998345, which is designated for “Interior decorating and design services.” This code should be used by professionals who offer services related to enhancing the interior of a building to achieve a healthier and more aesthetically pleasing environment for the people using the space.

• Examples:
  • Space planning: Creating functional layouts for rooms and offices.
  • Furniture arrangement and selection.
  • Color palette consultation and material selection.
  • Aesthetic design for residential or commercial interiors.

The SAC code for interior design services India (998345) also has a standard GST rate of 18%. For a comprehensive and updated list of all codes, you can refer to the official CBIC website.

How to Use SAC Codes in Your GST Invoices

Knowing the right SAC code is only half the battle; you also need to use it correctly on your invoices. A GST-compliant invoice has several mandatory fields, and the SAC code is one of them. Including it clearly and accurately is essential for your client’s records and your own GST filings. Our Understanding GST Invoicing: A Detailed Guide provides further details on creating compliant invoices.

Here’s a simple guide on how to include it:

1. Create a Dedicated Column: Your invoice template should have a specific column for HSN/SAC codes.
2. Describe the Service: In the “Description” column, write a clear summary of the service you provided (e.g., “General Construction Service for Residential Building” or “Interior Design Consultation”).
3. Enter the SAC Code: In the HSN/SAC column next to the service description, enter the correct 6-digit SAC code.
4. Apply GST: Calculate the GST based on the taxable value of the service and the rate associated with the SAC code.

Sample Invoice Line Item:

Description of Service	SAC Code	Taxable Value (₹)	CGST @ 9% (₹)	SGST @ 9% (₹)	Total (₹)
Architectural Design Services	998341	50,000	4,500	4,500	59,000

Remember, for intra-state (within the same state) transactions, you will apply CGST (Central GST) and SGST (State GST). For inter-state (between two different states) transactions, you will apply IGST (Integrated GST).

Conclusion: Simplifying GST with the Correct SAC Codes

Mastering the use of SAC codes may seem like a small detail, but it’s a cornerstone of good GST compliance. For professionals in the construction, architecture, and interior design sectors, using the correct SAC code for construction or design services is non-negotiable. It ensures that you charge the correct tax, file accurate returns, and build trust with your clients through transparent invoicing. Getting this right from the outset saves you from potential legal issues, penalties, and the stress of dealing with tax notices. It allows you to focus on what you do best: building and designing incredible spaces.

Feeling unsure about your GST compliance? Let TaxRobo’s experts handle your GST registration and filing, so you can focus on building your business. Contact us today!

Frequently Asked Questions (FAQs)

1. What is the main SAC code for construction services in India?

The primary heading for construction services is 9954. Specific services like general building construction fall under 99541, while civil engineering works are under 99542. The correct code depends on the exact nature of the work you are performing.

2. Is there a difference between HSN and SAC codes?

Yes. HSN (Harmonized System of Nomenclature) codes are 8-digit codes used to classify goods under the GST regime. In contrast, SAC (Services Accounting Code) codes are 6-digit codes used to classify services.

3. What is the GST rate for architect and interior design services?

The standard GST rate for most professional services, including those covered by the SAC code for architect services India (998341) and the SAC code for interior design services India (998345), is 18%.

4. What if my service is a mix of construction and design (turnkey project)?

For composite supplies like turnkey projects, where both goods and services are provided, the GST treatment depends on the principal supply. If the main component is a works contract service, the corresponding construction SAC and GST rate would apply. It’s best to consult a tax professional to determine the correct classification and applicable GST rate to ensure compliance. TaxRobo can help you with this through an Online CA Consultation.