Tax Consultancy and Preparation Services

What this SAC code covers

Tax advisory services including income-tax return preparation, GST compliance, TDS reconciliation, transfer pricing advisory, and other tax consulting.

Common services billed under SAC 998223

• ITR filing
• GST filing
• Tax advisory
• TDS reconciliation
• Transfer pricing

GST split: CGST, SGST, and IGST

The 18% GST on SAC 998223 splits depending on whether the supply is intra-state or inter-state:

Statutory reference

Notification 11/2017-CT(R) dated 28 June 2017, Schedule II, Heading 9982 — "Legal and Accounting Services" — taxable at 18%.

Place of supply

Section 12(2)(a) of the IGST Act — location of the registered recipient. For individual (B2C) tax-prep clients without a GSTIN, the place of supply is the recipient address recorded on the invoice (Section 12(2)(b)).

Export-of-service treatment

Zero-rated for tax advisory to NRIs / foreign companies on India-specific tax matters when consideration is in convertible forex. Standard LUT route. NRI ITR filing for a US-resident Indian-source-income client is the most common scenario.

Reverse charge (RCM)

Not under reverse charge. Not under reverse charge — the supplier collects and remits GST in the normal forward-charge manner. Reverse charge under Section 9(3) of the CGST Act applies only to a notified list (GTA services, advocate services, sponsorship, director-fee payments by companies, and a handful of others).

Composition scheme for services

Freelancers and small service businesses with aggregate turnover under Rs. 50 lakh in the prior financial year may opt for the composition scheme for services and pay GST at a flat 6% instead of the standard 18%, in exchange for forgoing input tax credit. Useful when your input costs are minimal and your clients do not need ITC (i.e., B2C-heavy practices). Opt in via Form GST CMP-02 on the GST portal at the start of the FY.

Input Tax Credit for the client

Fully claimable by GST-registered business clients. Tax compliance fees are direct business expenses and squarely outside Section 17(5).

GSTR-1 reporting

GSTR-1 Table 12 + Table 4A (B2B clients) + Table 7 (B2CS for individual ITR clients, intra-state ≤ Rs. 2.5L). Most CA practices have heavy B2CS volume in July/August (ITR season) — make sure your invoicing software bucketed those correctly.

Worked example

A Chennai-based CA (TN state code 33) prepares the GSTR-1 + GSTR-3B + 26AS-reconciled ITR-4 for a Karnataka-based freelance designer (KA state code 29). Rs. 1,00,000 annual retainer billed quarterly. Inter-state → IGST 18% on each quarterly invoice.

Invoice of Rs. 25,000 under SAC 998223:

• Intra-state client (same state):
  • CGST @ 9%: Rs. 2,250
  • SGST @ 9%: Rs. 2,250
  • Invoice total: Rs. 29,500
• Inter-state client (different state):
  • IGST @ 18%: Rs. 4,500
  • Invoice total: Rs. 29,500

Related SAC codes

If SAC 998223 does not exactly fit your service, consider these alternatives:

• SAC 998221 — Financial Auditing Services — Statutory audit, internal audit and assurance services.
• SAC 998222 — Accounting and Bookkeeping Services — Bookkeeping, accounting and financial statement preparation.

Related GST terms

Plain-English definitions for the GST concepts behind this SAC:

• GSTR-1 — Monthly or quarterly return of outward supplies (sales) filed by every registered taxpayer.
• GSTR-3B — Monthly summary return where you pay GST liability and claim Input Tax Credit.
• GSTR-2B — Auto-drafted, static monthly ITC statement showing which inward supplies you can claim.
• CGST, SGST, and IGST — Three GST components: Central GST, State GST, and Integrated GST.
• SAC (Services Accounting Code) — 6-digit code that classifies services for GST reporting (the services equivalent of HSN).

Key rules to remember

• SAC is mandatory on every B2B invoice when your aggregate turnover in the preceding financial year was Rs. 5 crore or more. For freelancers below that, SAC is optional but recommended.
• Use 6-digit SAC on invoices issued to GST-registered customers; 4-digit for unregistered customers in B2CS supplies.
• GSTIN-to-state mapping determines intra-state vs inter-state. The first two digits of your GSTIN and your client's GSTIN tell the system which split to apply.
• Place of supply may override location for some services (e.g., events, training). Verify under Section 12 of the IGST Act if your service has a defined place of supply rule.

Common mistakes (CA-flagged)

• Issuing a single annual invoice for ongoing monthly compliance work — under GST, the time of supply is the earlier of invoice date or payment date (Section 13 of CGST Act). Issue invoices in the period the service is rendered to avoid time-of-supply mismatches at audit.
• Charging GST on Section 195-grossed-up fees from a foreign client — the GST is on the gross fee, but the gross-up only affects the income-tax side, not GST.

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