GST Rates on Construction Services in India and SAC Code

The items and Services Tax (GST) is a tax on the sale of items and services in India. It is a broad indirect tax. It started on July 1, 2017, to replace a number of indirect taxes that the national and state governments used to charge. The construction business is one of the most important ones affected by GST. It has its own set of GST rates and SAC (Services Accounting Code) codes.

GST Rates on Construction Services: Under GST, construction services fall under the “works contract services” category. The GST rates on construction services change based on things like the type of construction, whether it is a residential or commercial project, the stage of construction, etc. The following are the GST rates that apply to building services:

  • Building a complex, building, or civil structure, including a complex or building that will be sold to a buyer (subject to certain conditions):
    – Homes: 5% without an Input Tax Credit (ITC) or 1% with an ITC
    – 12% of commercial buildings don’t have an ITC

Works Contract Services (for contracts with the government):
– The definition of a composite supply of works contract in the GST law: 12%

  • Composite Supply (contracts for work that aren’t for the government):
    – Goods part (value of materials): 18% or 28% GST, depending on the case
    – Service part (value of work involved): 12%
  • Services for fixing up, repairing, and keeping up with homes:
    – Individual services provided: 5% without ITC
    – 18% with ITC for services given to a registered person (business owners).

Note: The GST Council may change the above rates from time to time, so it’s always a good idea to check the latest legal information.

SAC Code on Construction Services: The Services Accounting Code (SAC) is a way for the government to identify and describe services that fall under GST. SAC numbers are used to register, file, and keep track of the services that are given. Here are some popular SAC codes for services related to construction:

  • Building services (large-scale building):
    – 995411: Services for building single-family or multi-family homes
    – 995421: Other home building construction services
  • Services for renovation, repair, and maintenance:
    – 995423: Services for changing, fixing up, or restoring private properties
    – 995424: Services for painting and decorating residential buildings
  • Other services related to construction:
    – 995431: Commercial building building services
    – 995439: Other construction tasks that don’t fit into any other category.

Note: The above SAC codes are based on the Central Goods and Services Tax (CGST) notices and may change. For correct and up-to-date SAC codes that apply to certain construction services, you should check the official GST portal or talk to a tax expert.

With the introduction of GST, there have been big changes to the way taxes work in the construction business. To make sure they are following the law, construction companies and service providers need to know the GST rates and SAC codes that apply to them. This page gives information about the GST rates and SAC codes that apply to construction services in India. But because GST rules can change over time, it’s always a good idea to keep up with the latest news and get correct advice from professionals.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *