IT Consulting and Support Services

What this SAC code covers

The default SAC for freelance IT consultants advising on architecture, vendor selection, system integration, security review, and ongoing technical support engagements.

Common services billed under SAC 998313

• IT strategy
• Architecture review
• Vendor selection
• Security audits
• DevOps consulting

GST split: CGST, SGST, and IGST

The 18% GST on SAC 998313 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 9983 — taxable at 18%. IT consulting is squarely inside the "Other professional, technical and business services" group.

Place of supply

Section 12(2)(a) of the IGST Act — location of the registered recipient (B2B). For ongoing managed-services / retainer engagements, the recipient location is fixed by their registered GSTIN address, not by the location of the user team you actually interact with day-to-day.

Export-of-service treatment

Zero-rated under Section 16 of the IGST Act when the recipient is offshore. Common for ad-hoc architecture-review engagements with US/UK clients — file LUT, invoice at 0% GST, hold the FIRC as evidence.

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 the GST-registered business client. Not blocked under Section 17(5).

GSTR-1 reporting

GSTR-1 Table 12 (HSN/SAC summary) + Table 4A (B2B invoices). Pair this SAC with 998314 cleanly: 998313 for advisory hours, 998314 for build/design hours — never mix on one invoice line. Clients reconciling 2B prefer the split because their internal cost-coding maps to it.

Worked example

Arjun, a Bangalore-based DevOps consultant (KA, state code 29), is engaged by a hospital chain in Delhi (DL, state code 07) to audit their on-call architecture across 3 hospitals. Rs. 1,00,000 for the engagement. Inter-state → IGST 18%.

Invoice of Rs. 1,00,000 under SAC 998313:

• Intra-state client (same state):
  • CGST @ 9%: Rs. 9,000
  • SGST @ 9%: Rs. 9,000
  • Invoice total: Rs. 1,18,000
• Inter-state client (different state):
  • IGST @ 18%: Rs. 18,000
  • Invoice total: Rs. 1,18,000

Related SAC codes

If SAC 998313 does not exactly fit your service, consider these alternatives:

• SAC 998314 — Information Technology Design and Development Services — Custom software development and design — the most common freelance dev SAC.
• SAC 998315 — Hosting and IT Infrastructure Provisioning — Server hosting, cloud infrastructure and managed-service provisioning.
• SAC 998316 — IT Infrastructure and Network Management — Network design, monitoring, on-call infrastructure operations.
• SAC 998319 — Online Content and Database Access Services — Hosted content, database access and SaaS-style content delivery.

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)

• Billing 998313 hours for what is actually shipped code — when the deliverable is a working system, the engagement is 998314, not 998313. Auditors look at the engagement letter; the wording "design and development" forces 998314.
• Forgetting to charge IGST on a retainer where the client is in a different state. The retainer model often blurs location; the GSTIN-to-GSTIN rule still applies on every monthly invoice.

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