SAC Code for Solar Installation Services

Every solar EPC in India bills two kinds of services on the same project: the physical supply of panels and inverters (governed by HSN codes), and the labour and professional services that turn those components into a working power plant (governed by SAC codes). Getting the SAC code wrong on your GST invoice is not a minor paperwork error, it can trigger ITC (Input Tax Credit) reversals for your commercial clients, attract GST audit notices, and in worst cases result in demand notices under Section 73 or 74 of the CGST Act, 2017.

This guide is the complete reference for SAC codes used in solar installation in India as of 2026: which code applies to which type of service, what GST rate each attracts, how to format your invoice correctly, and what the difference is between HSN codes (for goods) and SAC codes (for services).

The difference between using SAC 998714 and SAC 9954 on the same project is not academic, it determines whether your B2B client can claim full ITC or faces a reversal. The section-by-section breakdown below will make this clear.

HSN vs SAC, what is the difference and when does each apply?

The HSN (Harmonized System of Nomenclature) code is used to classify goods (movable property) supplied under a GST invoice. The SAC (Services Accounting Code) is used to classify services, work, labour, professional activity, maintenance contracts, and any transaction that is not the sale of movable goods.

In a typical solar EPC project, you supply both:

• Goods: Solar PV modules, inverters, mounting structures, cables, batteries, switchgear. These are classified with HSN codes.
• Services: Installation labour, commissioning, civil foundation work, site survey, design engineering, O&M, AMC. These are classified with SAC codes.

For residential projects under PM Surya Ghar Muft Bijli Yojana, where customers are unregistered (B2C) and cannot claim ITC anyway, the distinction between HSN and SAC matters less. For commercial rooftop projects where your client is a GST-registered company expecting to claim ITC on your invoice, correct SAC classification is critical. For more background on GST applicability across the solar project, see the guide on GST on solar system in India.

SAC code 9954, construction services for solar projects

SAC 9954 covers construction services under the GST framework. Within 9954, the relevant sub-headings for solar projects are:

• 995431, Civil work for installation of turbines, generators, boilers, or solar power plants (18% GST)
• 995432, Construction of overhead power transmission lines and substations (18% GST)
• 995433, Construction of underground distribution lines (18% GST)

When does SAC 9954 apply to a solar project? When your invoice includes civil construction activity that is integral to the installation, specifically:

• Laying concrete foundations for ground-mounted solar arrays
• Constructing module mounting structures (MMS) embedded in the ground with civil footings
• Building cable trenches and conduit installations that are permanently affixed to the land
• Constructing electrical panels or transformer rooms for utility-scale projects

The distinction matters for ITC. Under Section 17(5)(c) and (d) of the CGST Act, ITC is blocked on goods or services used in construction of immovable property. If your invoice uses SAC 9954 for a rooftop project that is not actually immovable construction, your commercial client may face ITC reversal disputes during audits. Always match the SAC to the actual nature of work.

SAC code 998714, installation and assembly services

SAC 998714 is the correct code for the majority of solar installation services in India. It covers:

"Installation services of industrial, manufacturing, or household machinery and equipment (including computers and similar equipment, not elsewhere classified)", which is exactly what rooftop solar installation is: the assembly of manufactured goods (panels, inverters, mounting hardware) into a functioning system.

GST rate: 18% on the service portion of the invoice.

SAC 998714 applies to:

• Residential rooftop solar installation (mounting structure erection, panel fixing, inverter installation, cabling inside the building)
• Commercial rooftop solar installation on existing structures
• Installation of solar water heaters, solar street lights, solar pumping systems
• Installation of batteries (BESS) and hybrid inverters
• Commissioning services (wiring checks, grid synchronization, system startup)

This is why the split invoice strategy, discussed in the section below, is so important for your commercial clients. Solar panels attract 5% GST (HSN 8541), while installation services attract 18% GST (SAC 998714). If you bundle everything into one consolidated invoice using the services code, your client effectively pays 18% GST on the panel value too, instead of 5%.

For the full breakdown on how GST rates apply to goods supplied in a solar project, see the guide on GST rate on solar panels in India.

SAC code 9983, professional and technical services

SAC 9983 covers professional, technical, and business services. Within solar, the relevant sub-heading is:

• 998313, Engineering advisory services, technical consultancy, engineering design services (18% GST)

This code applies to:

• Site survey and shadow analysis reports
• Solar system design and engineering drawings
• Load analysis and system sizing calculations billed separately from installation
• Grid connectivity feasibility reports prepared for DISCOM submission
• Project commissioning reports and performance certificates

Most small and medium EPCs bundle survey + design into the installation price and bill a single amount. For EPCs that separate these as line items (typically in commercial projects above 50 kW), billing the survey under SAC 9983 and the installation under SAC 998714 is the correct approach.

SAC codes for O&M, AMC, and ongoing services

Operations and maintenance (O&M) services and annual maintenance contracts (AMC) are not installation, they are maintenance. The correct SAC codes are:

• 998719, Maintenance and repair services of other machinery and equipment (18% GST), for general O&M visits, panel cleaning, wiring inspections
• 998722, Maintenance and repair of household appliances (18% GST), occasionally used for residential solar O&M by some tax advisors, but 998719 is more accurate
• 998313 (SAC 9983 sub-heading), For AMC contracts that include periodic engineering inspections with a written report component

Complete SAC code reference table for solar EPCs

Source: CBIC GST rate notifications and circulars, updated December 2023 and March 2025.

The SAC Code Selection Framework, how to choose the right code

Here is the proprietary decision framework our team calls the SAC Selection Triangle: three questions that narrow down the correct code for any solar billing situation.

Question 1: Is the work permanently affixed to land (immovable) or to a movable structure?

• Permanently affixed to land (concrete footings, underground conduit) → SAC 9954 (995431)
• On existing movable/rooftop structure → SAC 998714

Question 2: Is this work being billed as part of the project, or as a standalone advisory deliverable?

• Part of installation project → SAC 998714 or 9954
• Standalone report/study (survey, design, DPR) → SAC 9983 (998313)

Question 3: Is this post-installation ongoing work?

• Post-installation service (O&M, AMC, repair) → SAC 998719
• Part of original installation → SAC 998714

1. 1

   Classify each line item independently

   Never apply a single SAC to the entire invoice. Break the invoice into: supply of goods (HSN), installation labour (SAC 998714), civil work if any (SAC 995431), and O&M if bundled post-warranty (SAC 998719).

2. 2

   Apply the SAC Selection Triangle

   Run each service line through the three questions above. Most residential rooftop installation lines will resolve to SAC 998714 within 10 seconds.

3. 3

   Verify composite supply vs mixed supply treatment

   If you cannot or will not split the invoice, determine the principal supply. If modules are the principal supply (by value), the entire transaction uses HSN 8541 at 5%. If installation is principal (service-heavy project like a large O&M tender), use SAC 998714 at 18%.

4. 4

   Confirm with your CA before GST return filing

   SAC classification disputes are one of the top reasons solar EPCs receive GST notices. Have a chartered accountant sign off on your standard invoice template once, and then use that template consistently. It takes 2 hours to set up and saves years of potential notices.

How to format your solar installation invoice, with GST line items

A correctly formatted invoice for a typical 5 kW commercial rooftop solar installation in Pune (MSEDCL territory) would look like this:

Invoice Header: GSTIN of your EPC, customer's GSTIN, invoice date, place of supply (state code)

Line Items:

Sr	Description	HSN/SAC	Qty	Rate	Value	GST%	GST Amount
1	Solar PV Modules 540 Wp (10 nos)	HSN 8541	10	₹12,800	₹1,28,000	5%	₹6,400
2	Solar Inverter 5 kW	HSN 8502	1	₹38,000	₹38,000	12%	₹4,560
3	Mounting Structure (MS galvanized)	HSN 7308	1 lot	₹18,000	₹18,000	18%	₹3,240
4	Installation & Commissioning	SAC 998714	1 job	₹22,000	₹22,000	18%	₹3,960
5	Site Survey & Design	SAC 998313	1	₹5,000	₹5,000	18%	₹900

Total value before GST: ₹2,11,000. Total GST: ₹19,060. Grand total: ₹2,30,060.

Comparison: residential vs commercial vs O&M billing

The SAC codes used, and the ITC implications, differ significantly by customer type. Here is a side-by-side comparison:

How to avoid ITC reversal on solar installation invoices

ITC reversal is the nightmare scenario: your commercial client claims ITC on your invoice, gets audited, and the GST officer disallows the credit because the SAC code on your invoice does not match the actual nature of service. Now your client is demanding a credit note from you.

The three most common ITC reversal triggers for solar EPC invoices are:

Trigger 1, Using SAC 9954 for rooftop installations. As noted above, 9954 is construction of immovable property. ITC on construction services for immovable property is blocked under Section 17(5) of the CGST Act 2017. A commercial client who claims ITC on an invoice raised with SAC 9954 will face reversal. The fix: use SAC 998714.

Trigger 2, Not splitting goods and services. If you raise a single composite invoice under SAC 998714 at 18% on the entire project value (including modules), your client pays 18% GST on panels that should only attract 5%. This is not technically an ITC reversal risk but is a real cost loss. Always split the invoice. According to CBIC Circular No. 47/21/2018-GST, composite supply tax rate follows the principal supply, but if you can separate the lines, do it.

Trigger 3, Billing O&M under installation SAC. O&M visits billed under SAC 998714 instead of 998719 can cause classification disputes during audits. The nature of 998714 implies a one-time installation event; O&M is an ongoing maintenance service. Use 998719 for all post-commissioning work.

The GST Council's rate lookup portal and CBIC's official CBIC GST portal are the authoritative sources for code lookup and rate verification in case of any dispute.

GST compliance for EPCs doing both residential and commercial work

Most growth-stage EPCs in India are doing a mix: 60–70% residential PM Surya Ghar installs and 30–40% commercial rooftop. Your invoicing system needs to handle both correctly without your accounts team manually switching codes on each invoice.

For residential B2C invoices, the GST compliance bar is lower, the customer is unregistered, cannot claim ITC, and does not need a perfectly split invoice. But for commercial B2B work, every line needs to be right. Your solar sales funnel probably segments leads by project type. Your invoicing should too.

The CBIC's interpretation of SAC codes for solar services is also referenced in decisions under CBIC Tax Information Portal advance ruling cases. Several state AAR (Advance Authority for Ruling) decisions have addressed solar EPC classification, particularly the Karnataka AAR and Gujarat AAR rulings on composite solar supply. These rulings confirm that when the dominant element of a solar EPC contract is supply of goods (modules + inverter), the entire contract takes the GST rate of the principal supply.

For your bookkeeping and capital planning, the solar business capital requirements guide and when to buy a solar CRM are useful reads as your EPC scales from 20 to 100+ projects per month.

How QuickEstimate helps EPCs generate GST-correct solar invoices

Priya's ops team at a 40-person EPC in Pune was raising invoices manually on a Word template. Every commercial client's accountant had a different format request. Half the time, the SAC code was wrong, or the module supply and installation were not separated. This led to two GST demand notices in FY 2024-25, both resolved, but with significant CA fees and senior management time.

The QuickEstimate platform generates proposals with pre-configured line items that separate supply and service, using the correct HSN and SAC codes for each component.

• Quotation System, build quote templates with separate HSN and SAC line items so every commercial invoice is GST-correct from day one.
• Proposal Generator, auto-calculate GST by component (5% on panels, 18% on installation), produce a PDF the customer's CA will accept without revision requests.
• Pipeline Management, tag each deal as residential (B2C) or commercial (B2B) so your accounts team applies the right invoice format at billing time.
• Sales Reports, track B2B vs B2C revenue split, identify your highest-margin commercial accounts, and plan your O&M contract pipeline for recurring revenue.

What to do this week, for your EPC's GST compliance

Three concrete actions that will protect your EPC from GST notices:

1. Pull your last 10 commercial invoices and check whether the SAC code matches the actual service on each line. If you find incorrect codes, issue revised invoices before your next GSTR-1 filing date. A proactive correction is always better than a demand notice.

2. Set up two invoice templates in your billing software, one for residential B2C (can use a single SAC 998714 line for the service portion) and one for commercial B2B (must split goods by HSN and services by SAC). Label them clearly so your accounts team applies the right one.

3. Consult your CA on whether your standard AMC contracts should be billed under SAC 998719 or require restructuring. If your AMC includes supply of spare parts (like replacement fuses, connectors), those parts need their own HSN line at the applicable goods GST rate.

Frequently asked questions

What is the SAC code for solar installation services in India?

The primary SAC code for solar installation services in India is 998714, which covers "installation and assembly of fabricated metal products, plant and machinery." This applies to residential and commercial rooftop solar installations on existing structures. The GST rate is 18% on the installation service value. For civil construction work (concrete foundations, ground-mounted arrays), SAC 995431 under the 9954 heading applies, also at 18% but with ITC restrictions under Section 17(5) of the CGST Act.

What is the difference between SAC code and HSN code in solar?

HSN (Harmonized System of Nomenclature) codes classify goods, solar PV modules (HSN 8541 at 5%), inverters (HSN 8502 at 12%), mounting structures (HSN 7308 at 18%). SAC (Services Accounting Code) codes classify services, installation labour (SAC 998714 at 18%), O&M services (SAC 998719 at 18%), site survey and design (SAC 998313 at 18%). On a solar EPC invoice, you will use both: HSN for components supplied and SAC for work performed.

Is GST 18% or 5% for solar installation services?

Solar installation services attract 18% GST under SAC 998714. The 5% GST rate applies specifically to solar PV modules (goods, HSN 8541) and certain solar energy devices classified as renewable energy devices. Installation work is always taxed at the service rate of 18%, not at the 5% goods rate. This is why splitting your commercial invoices into goods and services lines is important, it ensures the module value is taxed at 5%, not 18%.

Can commercial solar clients claim ITC on installation services?

Yes. A GST-registered commercial client can claim Input Tax Credit (ITC) on solar installation services billed under SAC 998714, provided the solar system is used for their taxable business activity. ITC is blocked only when the solar installation involves construction of immovable property (SAC 9954 / 995431) under Section 17(5) of the CGST Act. This is why rooftop installation on an existing building (998714) gives full ITC, while ground-mounted civil construction (995431) blocks ITC.

Which SAC code to use for solar O&M and AMC services?

Solar O&M (operations and maintenance) and AMC (annual maintenance contract) services should be billed under SAC 998719, which covers "maintenance and repair services of other machinery and equipment." The GST rate is 18%. Do not use SAC 998714 (installation) for post-commissioning service visits, it creates a classification mismatch during audits. If your AMC includes supply of consumables or replacement parts, those must be separately billed with the applicable HSN codes.

What SAC code applies for a solar site survey charged separately?

A solar site survey, load analysis, shadow analysis report, or engineering design drawing billed as a standalone deliverable falls under SAC 998313 (engineering advisory and technical consultancy services) at 18% GST. If the survey fee is bundled into the overall installation contract without a separate line item, it becomes part of the installation service under SAC 998714.

Does a residential PM Surya Ghar installation need a GST invoice?

Yes, all GST-registered EPCs must issue a GST invoice for every supply of goods or services, including residential PM Surya Ghar installations. For B2C residential customers (who are typically unregistered under GST), you issue a regular retail invoice with CGST + SGST applied at the applicable rates. The customer cannot claim ITC but needs the invoice for the PM Surya Ghar subsidy application and DISCOM net metering approval process.

What is the place of supply for solar installation services?

For solar installation services involving immovable property (which includes rooftop solar systems on a specific building), the place of supply is the state where the immovable property is located, per Section 12(3) of the IGST Act. If your EPC is registered in Gujarat but installs a system in Maharashtra, you charge IGST (not CGST+SGST), and the place of supply is Maharashtra. This affects your GST registration requirements if you regularly do inter-state installations.