What is a SAC code?
SAC, the Services Accounting Code, is the classification framework used on Indian GST invoices to identify services being supplied. While HSN codes classify goods, SAC codes classify services, and the HSN code reference for solar hardware covers the goods side in detail. Together they cover the full universe of GST-eligible supplies. For solar businesses, SAC codes appear on invoices for installation, design, commissioning, annual maintenance, and consulting services.
SAC codes are organised in a hierarchical structure similar to HSN. The structure starts with broad chapters and extends through 6-digit specific subcodes. The GST rate notification for installation and technical services for solar power generating systems names headings 9954 (construction services), 9983 (other professional, technical and business services) and 9987 (maintenance, repair and installation services); practitioners often use 6-digit codes such as 995461 (electrical installation services), which you should confirm with your CA. A dedicated guide covers the specific SAC codes for solar installation services chapter by chapter. The exact applicable SAC and GST rate is published in CBIC notifications.
Correct SAC coding is mandatory above turnover thresholds. Businesses above ₹5 crore aggregate annual turnover must use full 6-digit SAC; smaller businesses use 4-digit. Wrong SAC can lead to wrong GST rate, ITC issues, and audit problems.
Why SAC codes matter
For solar EPCs, every services component of an invoice needs the correct SAC. EPC services are typically structured as composite supplies bundling goods and services; SAC identifies the service component and its applicable GST rate.
For customers, the SAC determines whether and how they can claim ITC on the service portion of their solar invoice. Commercial customers with GST registration claim ITC; residential customers cannot. For the fuller picture of GST on solar installation services more broadly, see how these service-side rules interact with the rest of the invoice.
For accountants, SAC reconciliation is part of monthly GST returns. The supplier-side SAC must match the customer-side claim for clean reconciliation, which is part of how EPCs reconcile GST across a solar contract end to end (see GST on solar systems in India).
For audit defence, clean SAC documentation is the protection against rate-mismatch challenges from tax authorities.
How SAC coding works on a solar service invoice
- Service identification. Each service component on the invoice is identified (installation, commissioning, AMC, etc.).
- SAC assignment. Each service maps to a SAC code from the CBIC services schedule.
- Rate lookup. Each SAC has a notified GST rate.
- Invoice line item. SAC code, description, rate, and amount on each service line.
- Composite supply handling. Where goods and services are bundled, principal supply rule determines the dominant tax treatment.
- Customer ITC. Customer files ITC claim referencing the SAC for service-component tax.
- Reconciliation. Supplier and customer side returns match through SAC.
Real example: SAC on a 25 kWp commercial rooftop EPC contract
Contract structure. Composite supply contract for design, supply, installation, and 1-year AMC of a 25 kWp solar system.
Invoice components. Modules (HSN 8541), inverter (HSN 8504), mounting (HSN 7610), cables (HSN 8544); see the GST rate on solar inverters for how HSN 8504 is rated. Installation and commissioning (SAC heading 9954, 9983 or 9987). AMC for 1 year (SAC heading 9987, commonly 998717 or 998719; not 998714, which is transport machinery).
Treatment. Composite supply with the principal supply (solar system installation) determining the dominant treatment. The relevant SAC and rate apply to the bundled supply.
GST rate. The complete solar system with installation follows the 70:30 rule: 70 percent goods at 5 percent and 30 percent service at 18 percent, about 8.9 percent effective. A separately billed AMC is 18 percent. Whether batteries, cables and structures in the same contract sit in the deemed 70 percent goods value is not settled in the notification text, so confirm with your CA.
Customer side. Commercial customer claims ITC on the full invoice subject to eligibility rules.
Benefits of correct SAC coding
- Correct GST rate. No over- or under-payment.
- Clean ITC for customer. Supplier-side SAC supports customer's claim.
- Audit defence. Documentation trail for service classification.
- Reconciliation efficiency. Cross-side filings match.
- Composite supply clarity. Proper treatment of bundled goods + services.
- Compliance simplicity. Reduces friction with tax authorities.
Limitations and challenges
Composite supply complexity. Determining principal supply in bundled EPC requires judgement.
Rate revisions. Periodic GST Council notifications change SAC-rate mapping.
Sector-specific clarification gaps. Some solar service categories have evolved through clarifications.
Smaller business overhead. Compliance burden on small EPCs.
Customer ITC mismatch risk. Supplier-side errors propagate to customer reconciliation.
Service vs goods boundary. Solar EPC blurs the boundary; classification can be debated.
SAC codes for solar services
| Service | Typical SAC chapter | Notes |
|---|---|---|
| Solar PV system installation | 9954 / 9983 / 9987 | 18 percent when billed separately; 70:30 rule inside a complete system contract |
| Solar system design and engineering | 9987 / 9983 | Engineering / consulting services |
| AMC (Annual Maintenance Contract) | 9987 | Maintenance services; 18 percent; 6-digit commonly 998717 or 998719 |
| Commissioning services | 9954 / 9987 | Part of installation services |
| Solar consulting | 9983 | Professional consulting |
| Repair services | 9987 | Maintenance and repair |
| Solar plant O&M (utility-scale) | 9987 / 9954 | Combined operation and maintenance |
Quick facts
| Full form | Services Accounting Code |
|---|---|
| Function | Services classification code for GST invoices |
| Digits | 4 to 6 (digit count depends on turnover) |
| Counterpart for goods | HSN code |
| Solar installation chapter | 9954 / 9983 / 9987 (18 percent when billed separately) |
| Source | CBIC services schedule, GST Council notifications |
| Mandatory above turnover | ₹5 crore for full 6-digit SAC |
| Impact on ITC | Correct SAC supports customer ITC claim |
Common mistakes about SAC codes
- Using HSN for services. Services use SAC, not HSN.
- Generic SAC across all service lines. Each service has its specific code.
- Outdated SAC references. Verify current CBIC notification.
- Composite supply mishandling. Principal supply rule determines dominant rate.
- Skipping SAC above threshold. Mandatory above ₹5 crore.
- Customer-side ITC risk from wrong SAC. Affects reconciliation.
- Confusing 4-digit and 6-digit SAC. Digit precision depends on business size.
- Manual lookup repeatedly. Use accounting software with SAC master.
Key takeaways
- SAC is the services classification code on Indian GST invoices.
- Solar installation services sit under SAC headings 9954, 9983 or 9987 and are taxed at 18 percent when billed separately.
- HSN classifies goods; SAC classifies services.
- Required 4-digit (smaller businesses) or 6-digit (above ₹5 crore turnover).
- Wrong SAC affects GST rate, ITC eligibility, and audit defence.
- Composite supply rule applies when EPC bundles goods and services.
- CBIC notifications update SAC-rate mapping; verify currently applicable.
Frequently Asked Questions
What is a SAC code?
SAC stands for Services Accounting Code. It is the 6-digit classification code used on Indian GST invoices to identify services being provided. For solar businesses, SAC codes apply to installation, design, commissioning, AMC, and consulting services. SAC is the services counterpart to HSN (goods).
What is the SAC code for solar installation services?
The GST rate notification for installation and technical services for setting up solar power generating systems (S.No. 38 of notification 11/2017-Central Tax (Rate)) covers headings 9954 (construction services), 9983 (other professional, technical and business services) and 9987 (maintenance, repair and installation services). The heading is what the notification names; 6-digit codes such as 995461 (electrical installation services) are commonly used in practice, so confirm the exact code with your CA.
Are SAC codes mandatory on invoices?
Yes, services on GST invoices need the appropriate SAC code. Above ₹5 crore aggregate annual turnover, full 6-digit SAC is required. Smaller businesses use 4-digit or higher classification level.
What is the GST rate on solar installation services?
A separately billed solar installation service is 18 percent GST (9 percent CGST plus 9 percent SGST, or 18 percent IGST). When a complete solar power generating system is supplied with installation in one contract, the 70:30 rule deems 30 percent of the value as the service at 18 percent and 70 percent as goods at 5 percent, about 8.9 percent effective. There is no 12 percent service rate for solar.
How is SAC different from HSN?
HSN codes identify goods (modules, inverters, mounting). SAC codes identify services (installation, design, AMC). A solar EPC contract often involves both: HSN for the materials supplied, SAC for the services rendered.
Where do I find SAC codes?
CBIC publishes SAC schedules on cbic.gov.in. The Services Schedule under GST Council notifications lists SAC codes by chapter, with corresponding tax rates and conditions.
What if my service is bundled with goods?
Bundled supplies (goods + services as one contract) require careful GST treatment. Composite supplies follow the principal supply rule. Mixed supplies attract the highest rate. Solar EPC contracts typically treat as composite with the appropriate dominant rate.
Do AMC contracts use SAC codes?
Yes. Annual maintenance contracts for solar systems use SAC codes under maintenance services chapters. The rate depends on the specific SAC and current notifications.
Are design and engineering services SAC-coded?
Yes. Engineering, design, and consulting services in solar projects use SAC codes under professional services chapters.
Can SAC codes change?
Yes. GST Council notifications can update SAC codes and rates. Verify current SAC before invoicing.
Do small EPCs need to use SAC codes?
Yes, but at lower digit precision. Smaller businesses (below ₹5 crore turnover) typically use 4-digit SAC. Above the threshold, full 6-digit is required.
What is the relationship between SAC and ITC?
Correct SAC on the supplier's invoice supports the customer's ITC claim. Mismatched or wrong SAC can lead to ITC reversal during audit. Clean SAC coding is part of clean ITC documentation.
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- Central Board of Indirect Taxes and Customs (CBIC). SAC schedules and service classification. cbic.gov.in
- GST Council Services Schedule. SAC-rate mapping.
- Ministry of Finance. Budget changes affecting service classifications.
- ICAI publications. Sector-specific SAC guidance.
- State Tax Departments. State-level service tax administration.
- GST Network (GSTN). SAC code reference in invoicing tools. gst.gov.in
- Indian Chartered Accountancy guidance. Composite vs separate supply treatment.
Written by Parth Maru, Sales & Operations Lead, Quickest Solar CRM (Surat).
Last updated: 14 October 2026.