The Central Board of Indirect Tax and Customs (CBIC) implemented the HSN and SAC code systems for the quick classification of products and services at the time the GST was adopted. Learn everything about SAC codes in this blog, including a list of them and their purposes.

What is the SAC code in GST?

Service Accounting Code is the SAC code. It covers all services provided within India. As a result, the SAC code system is employed in India to identify, categorise, quantify, and ascertain the applicability of GST on services.

For Indian commodities, the Harmonized System Nomenclature (HSN) code is used. The HSN code is based on the multifunctional nomenclature code used by the World Customs Organization (WCO) to identify items equally over the world. On the other hand, the SAC coding system is based on the Central Product Classification of the United Nations (UNCPC). But, the CBIC has altered it to fit the Indian setting.

All the explanations provided for the classification of services in India are based on the UNCPC system's notes. The committee established to apply the SAC system in India also suggested several adjustments, which are included in this code and its comments.

Services that fall under the SAC code are taxed under five distinct tax slabs under the GST regime: 0%, 5%, 12%, 18%, and 28%. Therefore, by default, an 18% GST charge will be applied to any services that are not listed on the SAC list or that have not been given a SAC code.

The government can analyse the GST revenues made for various services thanks to the allocation of specific SAC codes, which are linked to certain services.

What is the Service Accounting Code Number?

A Service Accounting Code under GST consists of six digits. All SAC codes begin with 99 because chapter 99 governs the provision of services. The service's nature is described by the other four digits. Let's use an illustration to clarify.

For instance, the SAC code for general construction services of single-family homes, multi-dwellings, and residential buildings with multiple stories is 995411.

Here,

• Like with all Service Accounting Codes, 99 stands for "chapter," which in this context refers to services.
• The major service category's "header," in this case, "construction services," is represented by the number 54.
• In this situation, "general construction services of buildings" is the primary service's unique nature as represented by the "service code" of 11.

What is the use of the Service Accounting Code in GST?

SAC codes have a variety of uses, such as:

• They provide each service with a different set of codes, making it simple to identify between them. They assist GST taxpayers in determining the GST rate that applies to the services they provide.
• These SAC codes must be used by GST taxpayers when they register on the GST portal, as well as on their invoices and in GST returns.

Service Accounting Code for Real Estate Agents

The SAC code's Real Estate Services on a Fee/Commission Basis or Contract Basis heading applies to the services rendered by real estate agents. The SAC codes that are pertinent to real estate brokers are as follows:

• SAC Code 997221: Property management services provided under a contract or for a charge.
• SAC Code 997222: Building sales conducted under a contract or on a fee/commission basis.
• SAC Code 997223: Land sales conducted under a contract or on a fee/commission basis.
• SAC Code 997224: Real estate evaluation services offered under a contract or for a charge.

For any real estate services provided on a fee/commission basis or under a contract, the appropriate GST rate is 18%.

SAC Code for Real Estate Services involving Owned or Leased Property

According to the Service Accounting Code, the following real estate services involving owned or leased property are classified:

• SAC Code 997211 – Rental or leasing services involving owned or leased residential property
• SAC Code 997212 – Rental or leasing services involving owned or leased non-residential property
• SAC Code 997213 – Trade services of buildings
• SAC Code 997214 – Trade services of time-share properties
• SAC Code 997215 – Trade services of vacant and subdivided land

Services provided by renting out residential properties for habitation are excluded from Tax. The GST rate for additional rental services would be 18%.

How to find the Service Accounting Code number for a property?

The SAC number for a property can be found on the property tax bill. The bill will have the property’s unique identification number along with the amount of tax that is due. Property owners can also find their SAC number by contacting their local property tax office. They will need to provide their property address and other relevant information to obtain their SAC number.

In some cases, property owners may not have a SAC number. This can occur if the property has not been registered with the local government. In this case, the property owner will need to register their property with the local government and obtain a SAC number before they can pay property taxes.

Why is the SAC number important?

The SAC number is important because it is used to identify the property and its owner in the tax records. It is also used to track the payment of property taxes. Property owners who do not have a SAC number will not be able to pay property taxes. They will need to register their property with the local government and obtain a SAC number before they can pay property taxes.

The Service Accounting Code number is also important because it is used to track the transfer of ownership of a property. When a property is sold, the new owner will need to obtain a new SAC number. This ensures that the tax records are updated and that the new owner is responsible for paying property taxes.

Conclusion

In conclusion, the Service Accounting Code number is a unique identification number that is assigned to every property that is registered with the local government. It is used to identify the property and its owner in the tax records and is also used to track the payment of property taxes. Property owners who do not have a SAC number will need to register their property with the local government and obtain a SAC number before they can pay property taxes. The SAC number is an important piece of information that property owners should be aware of when paying property taxes. Online Legal India has the greatest team of legal professionals to answer your questions about SAC for Chartered Accountant Services in order to provide the best services to customers or clients.