You finish your first GST invoice and hit a field marked "SAC code". A search turns up a dozen different numbers, a forum thread insisting designers use one code and developers another, and a client's accounts team who rejects your invoice because the code looks wrong. Freelancers often copy a code from a friend and never check what it actually covers, and some codes that circulate online describe a different service entirely.
There is no single SAC code for freelancers. The code follows the service you supply: 998391 for graphic and other specialty design, 998314 for web and software development, 998313 for IT consulting and support, 998395 for translation, and 998311 for management consulting. Writers and SEO or social media freelancers have no dedicated code. This post lists the codes from the official classification, how many digits you need, the GST rate, and how to choose when two codes seem to fit.
A SAC is a six-digit service code, and a registered person's tax invoice carries one
Services are classified under Chapter 99 of the Scheme of Classification of Services, annexed to Notification 11/2017-Central Tax (Rate). A heading has four digits, such as 9983 for other professional, technical and business services, and a full code has six, such as 998391. Rule 46 requires a registered person's tax invoice to carry the accounting code of the service. The official descriptions in this post come from the GST Council's explanatory notes to the scheme, dated October 2019, so check the live list on the GST portal for later edits.
Designers use 998391, and developers use 998314
Code 998391 is "specialty design services including interior design, fashion design, industrial design and other specialty design services", and its inclusions list graphic design, including graphic design for advertising purposes. Code 998314 is "information technology design and development services", which includes designing the structure and content of a web page and writing the code to create it, as well as custom applications and databases. Code 998313 is IT consulting and support, such as advice on IT matters and troubleshooting, and it excludes building an IT solution such as a website, which goes to 998314.
Several codes that circulate online are wrong. 998313 is not software development. 998366 is not management consulting, since it covers the sale of advertising space or time, and management consulting is 998311. 999293 is not a creative or artistic code, because it is commercial training and coaching. 998221 is financial auditing, and bookkeeping is 998222.
Writers, SEO and social media work have no dedicated code
The official list has no code for copywriting, content writing, SEO or social media management. Writing for an advertising campaign falls under 998361 advertising services. For articles and books, 999632, services of authors, is the closest literal match, and 998399, other professional, technical and business services not elsewhere classified, is the residual code. Neither is officially assigned to freelance writing, so confirm the choice with a CA. A code for editing video is 999613, audiovisual post-production, which covers editing, colour correction, visual effects, captioning and subtitling. Photography has several codes, and 998383 covers event photography and videography only, so portrait work is 998381 and advertising photography is 998382.
When two codes fit, pick the most specific one and stay consistent
The explanatory notes say that where a service can be classified more than one way, the most specific description is preferred over a more general one. They also route some cases directly: graphic design that is an integral part of a full advertising service goes to 998361, while separate graphic design goes to 998391. For a bundle of work, use the code for the principal service you are selling, use it the same way on every invoice, and ask a CA if it is unclear. A client's accounts team cares about consistency as much as the number itself.
Four digits up to ₹5 crore, six digits above it
Notification 78/2020-Central Tax, effective 1 April 2021, requires a registered person with aggregate turnover up to ₹5 crore in the previous year to give four digits of the code, and above ₹5 crore to give six. A registered person up to ₹5 crore may leave out the number of digits on invoices to unregistered persons. Giving the full six digits is harmless, and it matches what clients' systems expect. GSTR-1 Table 12 now takes the code from a dropdown, with separate B2B and B2C tabs, per the GSTN advisory, so your invoice code has to match a code the portal accepts. Phase 4 of that table was still to be communicated when the advisory was issued, so check the portal.
Most of these services carry 18 percent GST
Most services under heading 9983, which covers the design, IT and consulting codes above, carry 9 percent CGST plus 9 percent SGST, or 18 percent IGST. Some services carry different rates, so read the rate notification entry for your own code. The guide to GST invoices for freelancers covers the rest of the invoice, and the guide on when a freelancer must register for GST covers the threshold.
If you are not registered, the tax-invoice code rule does not apply to you
Rule 46 applies to a registered person, so an unregistered freelancer does not issue a tax invoice with a SAC code. You may still note the service on a plain invoice, and your client's records may ask for it. Which document an unregistered freelancer issues is covered in the guide to the bill of supply versus the tax invoice, and the free invoice template shows where the code goes.
Rinto prints the code you choose on a GST-ready invoice
Rinto creates GST-ready invoices with automatic IGST, CGST and SGST calculation. You still choose the correct SAC for your service, and your CA can check it. Rinto does not file GST returns, which you do on the GST portal. This post is general information, not tax advice.
Frequently Asked Questions
What is the SAC code for a graphic designer?
The official list gives 998391, specialty design services including interior design, fashion design, industrial design and other specialty design, with graphic design, including graphic design for advertising purposes, among its inclusions. If the design is an integral part of a full advertising service, the notes route it to 998361 advertising services instead. Use the same code consistently on every invoice, and check the live list on the GST portal or with your CA if your work blends both. Write the same code on every design invoice so a client's accounts team sees one consistent entry.
What is the SAC code for a web developer?
Building a website or custom software falls under 998314, information technology design and development services, which includes designing the structure and content of a web page and writing the code to create it. Code 998313 is IT consulting and support, such as advice and troubleshooting, and it excludes building an IT solution such as a website. Hosting is 998315. Choose the code for the principal service in each invoice, and keep your choice consistent across clients. Quote the code in your proposal too, so the client's accounts team sees it before the first invoice.
What SAC code should a content writer use?
The official list has no dedicated code for content writing or copywriting. Writing the words for an advertising campaign falls under 998361 advertising services. For articles and books, 999632, services of authors, is the closest literal match, and 998399, other professional, technical and business services not elsewhere classified, is the residual code. Neither is officially assigned to freelance writing, so confirm your choice with a CA and use it consistently. Whichever you pick, write it the same way on every invoice.
How many digits of the SAC code do I need on an invoice?
Under Notification 78/2020-Central Tax, effective 1 April 2021, a registered person with aggregate turnover up to ₹5 crore in the previous year gives four digits, and above ₹5 crore gives six. Those up to ₹5 crore may leave out the digits on invoices to unregistered persons. GSTR-1 Table 12 takes the code from a dropdown on the portal. Giving all six digits is harmless, and many clients' systems expect them, so it is simplest to use six. A client's accounts team may reject an invoice whose code the portal does not accept.
Does an unregistered freelancer need a SAC code?
The rule that puts an accounting code on an invoice, Rule 46 of the CGST Rules, applies to registered persons. An unregistered freelancer does not issue a tax invoice, so a SAC code is not a legal requirement on their invoice, though a client may still ask for one for their records. Do not add GST until you hold a GSTIN. Once you cross the threshold and register, use the correct code from the effective date of registration. A registered freelancer must put a code on tax invoices from the date registration takes effect.