SAC code full form is Service accounting code which is a system of nomenclature introduced by the Central Board of Indirect Taxes and Customs (CBIC). These codes are used to identify services and GST Rates associated with these services to compute tax liability. SAC (Services and Accounting Code) codes depend on the Harmonized System of Nomenclature, a globally perceived framework for arranging and classifying all the services. This framework empowers the consistency of GST dependent on universal principles. It will give a typical structure to the government for the collection of data or analyzing the equivalent.
The SAC full form in GST means Services Accounting Code under which services fall under GST are classified. HSN and SAC codes are used to classify goods and services under the GST regime in India.
Under GST law SAC refers to the 6-digit SAC in GST. For instance, the SAC for catering services provided in flights, trains etc.., is 996335.
(i) The initial two digits in SAC are the same for all services, i.e., 99.
(ii) The next two digits state the significant idea of services(63), say in this situation, catering services.
(iii) The last two digits state the nature of services (65), say in this situation, catering services provided in flights, trains, and so forth.
Here are the reasons why SAC codes are important for the business: (i) SAC codes help the business and client to distinguish the GST rates prevalent to their particular service. (ii) SAC code is required to be mentioned at the time of GST registration and GST Invoicing. (iii) These codes help to recognize and distinguish the services from the huge number of services available.
The basic difference between the HSN and SAC code under GST is that HSN is used to identify the Goods and SAC codes are used to identify the services. Another contrast between the two is the number of digits present in the code, for instance, HSN number has 8 Digit codes while SAC number has 6 digit codes.
The SAC codes include GST rates against the various services mentioned in the SAC Codes. Hence, it is essential to know the SAC codes. To know the GST rates and SAC Code of various services you may service code in GST visit this page.
GST SAC code must be used by the service providers at the time of filing GST Returns and issuing invoices. Here are the criteria for furnishing the SAC code in the GSTR filling.
(i) SAC code isn’t compulsory if the organization’s turnover is under 1.5 Crores INR.
(ii) SAC code is compulsory for businesses whose turnover is above 1.5 Crore INR.
Chapter 99 of the HSN module is the chapter that helps in identifying the different categories of service under SAC code.
SAC codes are utilized to identify various services rendered by business organizations. In case if the turnover of the service provider is more than 1.5 Crores INR, at that point he/she should specify the SAC code in the invoice. What's more, during GSTR fillings he/she should specify the SAC code for GSTR filling. This does not only saves time for the organization but also helps in keeping a check on the finances.