SAC Code for IT Services India — Complete Guide 2026

India's information technology industry is one of the most significant economic pillars of the nation — a $250+ billion sector that employs millions of professionals, drives the majority of India's service exports, and has established the country as the world's premier technology outsourcing destination.

From the startup software development company in Bengaluru or Hyderabad building custom applications for domestic clients, to the global IT services giant providing managed infrastructure to multinational corporations, from the digital marketing agency in Delhi running performance campaigns for e-commerce brands, to the cybersecurity firm protecting Indian banks and financial institutions, from the solo IT consultant providing technical advisory to businesses, to the SaaS company serving thousands of small business customers across India — every IT service transaction in India generates a GST invoice, and every invoice must carry the correct SAC code.

SAC code classification for IT services is commercially critical because:

18% GST applies across virtually all IT services — and on the revenue volumes typical for IT companies, even small classification errors compound significantly. An IT company billing ₹1 crore per month that systematically uses the wrong SAC code is creating regulatory risk on every invoice.

Export of IT services has special treatment — services provided to foreign clients in foreign currency are zero-rated exports (0% GST under LUT), and the same SAC code applies to both domestic and export billing — the GST rate changes but the SAC code remains constant. IT companies must manage both domestic (18%) and export (0%) billing with the same service classification.

TDS on IT service income is 10% under Section 194J — clients deducting TDS from IT service payments need the correct service classification for Form 26AS reconciliation. TDS and SAC codes are independent systems, but consistent service classification supports overall tax compliance.

Multiple IT service types coexist in one company — most IT companies provide a mix of software development, maintenance, consulting, hosting, and training services — each potentially with a different SAC code, though typically all at 18% GST.

This comprehensive guide provides the complete SAC code reference for Indian IT services — covering every category of technology service from software development through cybersecurity, cloud computing, digital marketing, and IT training — with GST rates, export treatment, and how ERP Group's GST invoicing system automates correct IT service SAC-based billing.

Use ERP Group's Free HSN/SAC Finder → to find the correct SAC code for any IT service instantly.

IT Services SAC Code Framework Overview

How IT Services Are Classified in the GST System

SAC Codes Begin With "99"

All SAC codes (Service Accounting Codes) begin with "99" — distinguishing them from HSN codes (for goods) which start with any digit. For IT services specifically, the primary SAC codes fall within the 9983 series (Other Professional, Technical, and Business Services) and the 9984 series (Telecommunications and Related Services).

Primary SAC series for IT services:

The Universal 18% GST Rate for IT Services

With very few exceptions, all IT services provided to domestic Indian clients are taxed at 18% GST. This uniformity simplifies rate management — unlike construction materials (5%, 18%, 28%) or food products (0%, 5%, 12%, 18%, 28%), IT companies face a single rate for virtually all their services.

The exception is export of IT services — provided to foreign clients, received in foreign currency — which are zero-rated under the GST framework (0% GST under LUT or with payment of IGST and subsequent refund).

For IT company accounting and compliance, read our comprehensive guide on accounting software for Pune IT companies.

IT Services GST Rate Structure

Understanding IT Services GST Before Looking Up SAC Codes

Domestic IT Services — 18% GST (CGST 9% + SGST 9% or IGST 18%)

When an IT company provides services to an Indian client:

• Intra-state supply (within same state): CGST 9% + SGST 9% = 18% total
• Inter-state supply (across states): IGST 18%

The place of supply for services is generally the location of the recipient — for B2B IT services, the client's state determines intra-state vs inter-state supply.

Export of IT Services — 0% GST (Zero-Rated)

When an IT company provides services to a foreign client (outside India) and receives payment in convertible foreign exchange:

• The service is classified as "export of service" — a zero-rated supply
• GST is NOT charged on export invoices (under LUT filing)
• The IT company can claim ITC (Input Tax Credit) on its inputs/input services
• The same SAC code applies — only the tax rate changes to 0%

LUT (Letter of Undertaking): IT companies exporting services must file LUT with the GST department — allowing export without payment of GST. LUT must be filed annually.

SEZ (Special Economic Zone) Supplies — 0% GST

IT companies providing services to SEZ units and SEZ developers:

• Treated as zero-rated supply (like export)
• 0% GST under LUT
• ITC available

SAC 998311 — IT Infrastructure Management Services

Complete Coverage for Infrastructure Management SAC Code

What SAC 998311 Covers

SAC 998311 covers "Management of Computer Facilities and Operation Services" — encompassing the management and operation of computing infrastructure on behalf of clients.

Services Classified Under SAC 998311

Who Uses SAC 998311

• Managed Service Providers (MSPs) providing outsourced IT operations
• Data centre operators
• IT infrastructure outsourcing companies
• Remote Infrastructure Management (RIM) providers
• Cloud service providers providing managed infrastructure

SAC 998312 — Software Development and IT Design Services

The Most Important SAC Code for Indian IT Companies

SAC 998312 is the most commercially significant SAC code for India's IT industry — covering custom software development, mobile app development, web development, and ERP/CRM implementation.

What SAC 998312 Covers

SAC 998312 covers "Information Technology Design and Development Services."

Services Classified Under SAC 998312

SAC 998312 and Export of Software Services

When Indian software companies develop custom software for foreign clients — the service is classified under SAC 998312 but is zero-rated (0% GST) as export of service. The same SAC code applies; only the tax rate changes based on whether the client is domestic or foreign.

This is the primary SAC code for India's massive IT export industry — the ₹200+ billion of software services exported from India annually are all classified under SAC 998312 (or 998313 for maintenance).

For IT companies in Pune, read our guide on accounting software for Pune IT companies.

SAC 998313 — Software Support and Maintenance Services

Complete Coverage for Software AMC and Support SAC Code

What SAC 998313 Covers

SAC 998313 covers "Information Technology (IT) Support and Maintenance Services" — covering post-deployment support, Annual Maintenance Contracts (AMC), and ongoing software maintenance.

Services Classified Under SAC 998313

The AMC Billing Scenario

Software AMC is one of the most commonly invoiced IT services by Indian software companies. An AMC contract typically covers:

• Bug fixes and patches for 12 months
• Technical helpdesk support (limited hours)
• Minor enhancements within a specified scope
• Software updates to the existing version

AMC SAC Code: 998313 at 18% GST

ERP Group's GST invoicing system supports recurring AMC billing — automatically generating monthly or quarterly AMC invoices with the correct SAC code (998313) and 18% GST, reducing billing admin for IT companies with large AMC portfolios.

SAC 998314 — IT Consulting Services

Complete Coverage for Technology Consulting SAC Code

What SAC 998314 Covers

SAC 998314 covers "IT Consulting Services" — encompassing technology advisory, digital transformation consulting, and strategic IT planning.

Services Classified Under SAC 998314

Independent IT Consultants and SAC 998314

Individual IT consultants — providing technology advisory on a contract basis to businesses — use SAC 998314 for their consulting invoices.

Important TDS note: Clients making payments to IT consultants must deduct TDS under Section 194J at 10% (for professional/technical services) if the payment exceeds ₹30,000 in a financial year. Use ERP Group's TDS Calculator → to calculate the correct TDS amount.

SAC 998315 — Network and Cybersecurity Services

Complete Coverage for Network and Security Services SAC Code

What SAC 998315 Covers

SAC 998315 covers "IT Infrastructure and Network Management Services" — including cybersecurity, network monitoring, and infrastructure security.

Services Classified Under SAC 998315

SAC 998316 — ITES and BPO Services

Complete Coverage for Business Process Outsourcing SAC Code

What SAC 998316 Covers

SAC 998316 covers "Information Technology Enabled Services (ITES)" — the business process outsourcing services that have made India a global service delivery hub.

Services Classified Under SAC 998316

ITES and Export Revenues

India's BPO/ITES sector earns the vast majority of its revenue from foreign clients — making SAC 998316 services primarily zero-rated exports. Indian BPO companies serving US, UK, and Australian clients bill in USD/GBP/AUD — qualifying as export of service at 0% GST.

SAC 998317 — Other IT Services

Cloud Computing, SaaS, and Emerging Technology Services

SAC 998317 covers "Other IT Services" — the catch-all for IT services not specifically classified under 998311-998316. Commercially, this is where cloud services, SaaS products, and emerging technology services fall.

Cloud Computing Services Under SAC 998317

Artificial Intelligence and Machine Learning Services

ERP Group's Own SAC Code

ERP Group — as a SaaS-based cloud ERP and billing platform — would classify its services under SAC 998317 (SaaS) or SAC 998312 (if providing implementation/customization services). Monthly SaaS subscription charges for ERP Group's platform are at 18% GST under SAC 998317.

SAC 998431 — Online Information and Database Services

SAC Code for Online Platforms and Subscription Services

What SAC 998431 Covers

SAC 998431 covers "Online Information and Database Access or Retrieval Services" — encompassing subscription-based access to online information, databases, and digital content platforms.

Services Classified Under SAC 998431

Digital Marketing SAC Codes

Complete SAC Reference for Digital Marketing Services

SAC 998461 — Advertising Agency Services

SAC 998461 covers advertising placement and media services:

SAC 998462 — Digital Marketing Services

SAC 998462 covers internet-specific marketing services — the primary SAC code for India's growing digital marketing sector:

For digital marketing agencies, use ERP Group's ROI Calculator → to demonstrate ROI from digital marketing campaigns to clients.

IT Training and Education SAC Codes

SAC Reference for IT Training Services

SAC 999219 — Private IT Training Services

Private IT training institutes (not recognized educational institutions) providing technology training courses attract 18% GST under SAC 999219.

SAC 999291 — Online IT Courses and E-Learning

Online technology courses provided via digital platforms:

SAC 999294 — Corporate IT Training

Corporate training and skills development programs for enterprise clients:

Use ERP Group's Salary Calculator → for IT training companies managing trainer compensation and benefits.

Export of IT Services — Zero Rating

The Most Important GST Rule for Indian IT Companies

What Qualifies as Export of IT Service

For an IT service to qualify as export of service (zero-rated, 0% GST), all four conditions must be satisfied:

1. The supplier of service is located in India
2. The recipient of service is located outside India
3. The place of supply is outside India
4. The payment is received in convertible foreign exchange OR in Indian rupees where permitted by RBI

When all four conditions are met — the service is a zero-rated export. No GST is charged on the invoice.

Common Export IT Service Scenarios

H4: Common Export IT Service Scenarios

LUT Filing for Export of IT Services

IT companies exporting services must file Form GST RFD-11 (LUT — Letter of Undertaking) at the beginning of each financial year. Under LUT:

• Export invoices are raised without charging any GST
• ITC on inputs and input services is fully available
• No refund process needed for tax paid on exports

Without LUT: The IT company would need to charge IGST on exports and then claim a refund — creating cash flow burden.

ERP Group's GST invoicing system generates export invoices correctly — with the LUT reference number, zero GST, and proper export invoice format — for IT companies exporting services.

Place of Supply for IT Services

For B2B IT services to a foreign client: place of supply = location of recipient (outside India). This confirms the export nature.

For IT services to an Indian client with offices in multiple states: place of supply = location where the service is received (typically the registered location of the recipient). This determines intra-state (CGST+SGST) vs inter-state (IGST).

TDS on IT Services — Section 194J

TDS Obligations for IT Service Receivers and Providers

TDS on Technical Services — Section 194J

When a business (not an individual or HUF with non-audit accounts) makes payments to IT companies for technical services:

• TDS rate: 2% on technical services (from FY 2020-21 onwards)
• TDS rate: 10% for professional services (if the IT service is classified as professional fee)
• Threshold: TDS applies if payment to one party in a financial year exceeds ₹30,000

Key distinction (post Budget 2020):

• Technical services (software support, maintenance, routine IT services): 2% TDS under 194J
• Professional services (consulting, advisory — where specialized professional judgment is applied): 10% TDS under 194J

For most IT companies — bulk of revenue is technical services at 2% TDS. Consulting and advisory specifically may attract 10% TDS.

Form 16A and TDS Certificate

IT companies receiving payments with TDS must:

• Reflect TDS credits in their books
• Verify TDS in Form 26AS (or Annual Information Statement — AIS)
• Reconcile TDS claimed with GSTR-1 revenue

ERP Group's TDS Calculator → helps IT companies verify the TDS amounts deducted by their clients on IT service payments.

SAC Codes for Specific IT Business Types

SAC Code Application by Company Type

Independent Software Vendor (ISV) / SaaS Product Company

An ISV building and selling software products (not custom development) primarily uses:

ERP Group — as a SaaS ERP platform — bills its subscription services under SAC 998317 and implementation under 998312 — all at 18% GST, with export billing at 0% for foreign clients.

IT Staffing and Resource Augmentation Companies

IT staffing companies providing dedicated developers, QA engineers, or IT professionals to client companies:

Note: When IT professionals are deployed at the client's site and work under the client's supervision, the service may be classified as staffing/manpower supply (SAC 998511) rather than IT service — affecting TDS treatment.

Digital Agency (Design + Development + Marketing)

A digital agency providing an integrated mix of services:

For digital marketing agencies managing client campaigns, use ERP Group's CRM software for campaign tracking and client management alongside the billing platform.

IT Product Company (Hardware + Software)

When an IT company provides both hardware (goods) and software/services:

A single invoice may contain both HSN-coded hardware and SAC-coded services — each with their respective classification. ERP Group's billing system handles mixed goods and services invoices.

IT Services GSTR-1 Reporting

How IT Companies Report Service Revenue in GST Returns

Table 12 — SAC-Wise Summary in GSTR-1

Every GSTR-1 filing by an IT company must include a SAC-wise summary in Table 12 — aggregating all service invoices by SAC code for the period, showing:

• SAC code
• Description of service
• Total taxable value
• GST amounts (CGST, SGST, IGST)

For an IT company with software development (998312), AMC (998313), and consulting (998314) revenues — Table 12 shows three separate SAC rows.

Export Invoice Reporting in GSTR-1

IT service exports are reported in Table 6A of GSTR-1 — "Exports (including deemed exports) with or without payment of tax." The SAC code appears here with zero GST, along with:

• Invoice number and date
• Port of export
• Foreign currency details
• LUT/Bond reference (if applicable)

SEZ Supply Reporting

SEZ supplies are reported separately from regular domestic supplies — in Table 6B for supplies to SEZ with or without payment of tax.

Common IT Services SAC Code Mistakes

The 8 Most Frequent IT Services SAC Classification Errors

Mistake 1 — Using HSN Code Instead of SAC Code for Services

Using a goods HSN code (like 9999 or a computer hardware code) on a software development invoice instead of the correct SAC code (998312). Service invoices must use SAC codes — not HSN codes.

Prevention: ERP Group's product master enforces SAC codes for service items — billing staff cannot select HSN codes for service lines.

Mistake 2 — Using SAC 998317 for All IT Services (Too Generic)

Using 998317 ("Other IT Services") as a generic catch-all for all IT services — including software development (should be 998312), consulting (998314), and maintenance (998313). While all are at 18% GST, using specific codes improves accuracy of GSTR-1 Table 12 reporting and professional compliance.

Best practice: Use the most specific applicable SAC code for each service type.

Mistake 3 — Not Zero-Rating Legitimate Export Invoices

Charging 18% GST on invoices raised to foreign clients who should receive zero-rated export invoices. This overcharges foreign clients (who cannot claim Indian GST), creates compliance complications, and defeats the purpose of the export service zero-rating framework.

Mistake 4 — Zero-Rating Domestic Services Incorrectly

Marking domestic client invoices (Indian companies) as export at 0% GST when the client is Indian. All Indian clients (except SEZ units) require regular 18% GST invoices.

Mistake 5 — Incorrect IGST vs CGST+SGST

Raising CGST+SGST invoices for inter-state services (when client is in a different state) — should be IGST. Or raising IGST for intra-state services — should be CGST+SGST. Place of supply rules determine which tax applies.

Example: Bengaluru IT company (Karnataka) billing a Delhi client (Rajasthan) — this is inter-state → IGST 18%. Not CGST+SGST.

Mistake 6 — Not Filing LUT for Export Services

Exporting IT services without filing LUT — resulting in either charging GST on exports (which foreign clients are not obliged to pay) or exporting without proper documentation (compliance risk).

Mistake 7 — Using 10% TDS When 2% Applies

IT service recipients deducting 10% TDS (professional services rate) on technical IT services payments that should attract 2% TDS. This reduces cash flow for IT companies unnecessarily — and creates TDS certificate mismatches.

Mistake 8 — Missing SAC in Invoice or GSTR-1 Table 12

Generating service invoices without SAC codes, or filing GSTR-1 without Table 12 SAC summary. Both create non-compliant invoices and incomplete GST returns.

How ERP Group Supports IT Company GST Compliance

The Complete IT Company Billing and Compliance Platform

ERP Group — India's AI-Powered GST Billing & Cloud ERP Platform — provides comprehensive SAC code management and GST compliance specifically suited to IT companies:

Service Master with SAC Configuration

ERP Group's GST invoicing system maintains a service master where each IT service type is configured with:

• Correct SAC code (998312 for development, 998313 for maintenance, 998314 for consulting)
• GST rate (18% for domestic, 0% for export under LUT)
• Service description
• Unit (hours, monthly, project, subscription)

Once configured, every invoice automatically carries the correct SAC and rate.

Domestic and Export Invoice Management

ERP Group supports both domestic and export billing in a single platform:

• Domestic invoices: SAC code + 18% GST (CGST+SGST or IGST based on supply type)
• Export invoices: Same SAC code + 0% GST + LUT reference + export invoice format
• SEZ invoices: SAC code + 0% GST + SEZ designation

IT companies billing both Indian and foreign clients can manage all invoice types from ERP Group's single platform without any rate configuration errors.

Recurring Invoice Automation for Retainers and SaaS

ERP Group's recurring billing feature is particularly valuable for IT companies with:

• Monthly retainer clients (consulting, management services)
• Annual AMC contracts billed quarterly or monthly
• SaaS subscription billing at regular intervals

Configure the billing schedule once — ERP Group generates and sends invoices automatically at the configured interval with the correct SAC and GST.

Multi-Currency Billing for Export Clients

IT companies billing foreign clients in USD, EUR, GBP, AUD, SGD, AED, and other currencies — ERP Group supports multi-currency invoice generation with INR equivalent (for GST registration and GSTR-1 reporting purposes).

GSTR-1 SAC Summary for IT Companies

ERP Group automatically generates the GSTR-1 Table 12 SAC-wise summary — aggregating domestic invoices by SAC code (998312, 998313, 998314 etc.) and separately reporting export invoices in Table 6A. This eliminates the manual data aggregation work that IT companies with multiple service types and large invoice volumes face.

Project-Wise Billing for Software Companies

ERP Group supports project-based invoicing — linking invoices to specific client projects with milestone-based billing (billing when a specific project milestone is achieved). For fixed-price software development projects with milestone billing, this is essential.

Employee Payroll for IT Companies

ERP Group's HR & Payroll software manages IT company payroll with:

• Salary and CTC management
• TDS deduction on salaries (Section 192)
• Form 16 generation
• PF and ESI compliance
• Variable pay and performance bonus calculations

Use ERP Group's Salary Calculator → for CTC-to-in-hand salary computation for IT professionals.

Client Relationship Management

ERP Group's CRM software manages IT company's client pipeline and relationships:

• Lead and opportunity tracking
• Client contact management
• SOW (Statement of Work) and contract tracking
• Project status and billing milestone tracking

Complete IT Company Platform

Conclusion — Correct SAC Codes Build Professional GST Compliance for IT Companies

India's IT sector — from startup software companies and independent IT consultants to global BPO majors and SaaS platforms — operates in a relatively simple GST environment compared to goods businesses. The uniform 18% rate across virtually all IT services means rate errors are rare. The primary SAC code compliance requirements are:

Use specific SAC codes for each service type:

• Software development: 998312
• Software support/AMC: 998313
• IT consulting: 998314
• Cybersecurity and network: 998315
• BPO/ITES: 998316
• Cloud/SaaS/other IT: 998317
• Digital marketing: 998462

Manage domestic vs export billing correctly:

• Domestic clients: 18% GST with correct CGST+SGST or IGST
• Foreign clients: 0% GST under LUT — export invoice format

Handle TDS correctly:

• Technical services received: 2% TDS under Section 194J
• Professional services: 10% TDS under Section 194J

Use ERP Group's Free HSN/SAC Finder → to find the correct SAC code for any IT service instantly.

ERP Group's GST invoicing system — with SAC-automated service billing, domestic and export invoice management, multi-currency support, recurring invoice automation, and GSTR-1 Table 12 auto-generation — connected to accounting software for complete books, CRM software for client management, and HR & Payroll software for team payroll — is the complete IT company financial management platform.

Are you a CA supporting IT companies with GST and tax compliance? Explore ERP Group's CA Partner Program → for cloud-based client management that makes IT company audit work efficient.

Book Your Free Demo — SAC-Automated IT Services GST Billing

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