SAC code is a nomenclature that is used in the GST system. The Central Board of Indirect Taxes and Customs created the SAC code under GST. Such codes help in recognizing services and their corresponding GST rates in order to compute the appropriate tax amount.
What Do You Understand by SAC Code in GST?
The SAC (Servicing Accounting Code) is a categorization system for services developed by the service tax division in India. In order to levy GST in India, the GST Council has adopted the SAC code system. In GST law, a six-digit code that designates a specific service is referred to as a SAC.
Who Can Use SAC Codes?
During the process of completing Goods and Services Tax Returns (GSTR) for services like hospitality, education, finance, and others are advised/required to use SAC codes. For companies with a revenue of less than Rs. 1.5 crore, no SAC code is required. However, companies with a turnover of Rs. 1.5 to Rs. 5 crores, it is mandatory to use. SAC code must be specified for the companies having annual turnover of more than Rs. 5 crores.
SAC Codes and GST Rates for Distinct Services
The SAC’s first two numbers are always 99, compiled via the middle 2 digits that denote the principal kind of service and the final two digits that specify specialized service information. Here are some SAC code and GST rate examples:
Recruitment & HR Management Services
The service consists of a six-digit SAC code of 9985 with the last two digits laid on the particular sort of recruitment & HR service that has been provided. 18% will be the GST rate for such a service.
The service comprises of six-digit SAC code of 9968, with the last two digits laid on the particular kind of courier service that has been offered. 18% will be the GST rate of such a service.
Legal Tax Services
The service comprises 6 digit SAC code of 9982 that has the last two digits relying on the particular kind of legal services that have been furnished. 18% GST rate shall be applied for the same services.
Several Advantages of the SAC Code Under GST
To the companies, SAC codes provide various advantages along with
Finding the Appropriate GST Rates for the Service
For finding out the pertinent GST rates for the specific service SAC codes would be used. The GST rates for certain services may change depending on their nature and categorization. Businesses may simply establish the exact GST rate for a service and charge the correct amount of tax to their clients by utilizing the SAC code system. This not only aids in GST compliance but also guarantees that clients are neither overpaid nor undercharged for the services they get.
Separation of Services From Other Activities
SAC codes can aid in distinguishing services from the large range of other services available. Businesses may use these codes to simply categorize and identify their services from other sorts of services or goods they provide. This aids with the maintaining of records and accounting, as well as a faster reporting process and compliance with GST requirements. Businesses may avoid misunderstanding or misinterpretation of their services by adopting SAC codes, ensuring that they are accurately categorized under the GST system.
Supporting Filing of GST Invoices
SAC codes must be mentioned during registering for GST and producing GST invoices. Businesses may guarantee that they give accurate and complete information about the services they offer to their clients by utilizing SAC codes. SAC codes also aid in the preparation of standardized GST invoices and the submission of GST returns. Businesses must file GST returns to detail their sales, purchases, and the amount of tax paid on them. Businesses may readily identify the services for which they have charged GST and declare them in their GST filings by utilizing SAC codes. This helps to avoid mistakes or anomalies in GST filings and ensures that firms follow GST requirements.
Through the heading and section, the SAC codes with their four to six-digit lengths would have been classified. Under SAC code 9983, each job work would secure its own SAC code, and technical, professional, and business services. For generating invoices and filing the GST returns in India such codes would be important in which millions of jobs would get supported by the services that get driven by the Gross Domestic Product (GDP).