The SAC code for construction services is 9954, and the general GST rate is 18% in India. However, certain residential construction projects, eligible works contracts and specified labour-only construction services may attract different GST rates or qualify for exemptions.
Construction services use SAC (Services Accounting Code) rather than HSN, as HSN codes classify goods. The exact six-digit SAC code depends on the type of construction activity.
What Is the SAC Code for Construction Services?
Construction services fall under SAC heading 9954, which covers the construction of buildings, civil engineering works, specialised construction activities, and related repairs or renovations.
| Particular | Details |
|---|---|
| Service | Construction services |
| SAC heading | 9954 |
| Classification | Construction services |
| General GST rate | 18% |
| CGST + SGST | 9% + 9% |
| IGST | 18% |
| Other applicable rates | Project-specific rates or exemptions may apply |
SAC 9954 is the broad classification. Businesses should select the appropriate six-digit SAC code based on the actual construction service provided.
SAC Codes for Different Types of Construction Services
The official GST classification includes separate codes for residential buildings, commercial buildings, industrial structures and civil engineering works.
| Construction service | SAC code |
|---|---|
| Construction of single or multi-storey residential buildings | 995411 |
| Construction of hostels, old-age homes and other residential buildings | 995412 |
| Construction of factories, workshops and industrial buildings | 995413 |
| Construction of offices, malls, hotels and other commercial buildings | 995414 |
| Construction of hospitals, schools and other non-residential buildings | 995415 |
| Construction of other buildings not elsewhere classified | 995416 |
| Repair, renovation and remodelling of buildings | 995419 |
| Construction of roads, bridges, railways and tunnels | 995421 |
| Construction of dams, waterways and irrigation works | 995422 |
| Construction of pipelines, power lines and related infrastructure | 995423 |
| Construction of local water, sewage and electricity networks | 995424 |
| Construction of mines and industrial plants | 995425 |
| Construction of power plants and related infrastructure | 995426 |
The correct code depends on the nature of the construction contract. For example, constructing a residential apartment building generally falls under SAC 995411, while constructing a commercial office building falls under SAC 995414.
GST Rate on Construction Services in India
Construction services do not have one uniform GST rate. The applicable rate depends on the project, contract structure, recipient and relevant GST notification.
| Type of construction service | General GST treatment |
|---|---|
| Ordinary taxable construction services | 18% |
| Construction of affordable residential apartments by a promoter under the applicable new-rate scheme | 1% effective GST, subject to conditions |
| Construction of other residential apartments by a promoter under the applicable new-rate scheme | 5% effective GST, subject to conditions |
| Certain commercial apartments in qualifying residential real estate projects | 5% effective GST, subject to conditions |
| Eligible predominantly earthwork contracts for specified government or local-authority recipients | 12%, subject to conditions |
| Certain qualifying pure-labour construction contracts | Exempt |
The effective residential apartment rates generally operate without input tax credit and under prescribed valuation and other conditions.
The 1% and 5% rates should not be applied automatically to every residential construction contract. They primarily concern qualifying supplies by promoters under the applicable real estate provisions.
GST on Residential Construction Services
Residential construction services may attract different GST rates depending on whether the transaction involves a promoter selling an under-construction apartment or a contractor providing construction services.
Qualifying affordable residential apartments under the applicable promoter scheme generally attract an effective GST rate of 1%.
Other qualifying residential apartments generally attract an effective rate of 5%.
However, an independent contractor constructing a house for a landowner does not automatically qualify for these promoter rates. The contract must be classified separately.
GST on Commercial Construction Services
Commercial construction services include the construction of offices, shopping complexes, hotels, warehouses and similar buildings.
Ordinary taxable commercial construction contracts generally attract 18% GST.
Certain commercial apartments forming part of qualifying residential real estate projects may receive different treatment under the prescribed real estate provisions.
GST on Civil Engineering and Infrastructure Construction
Civil engineering services include road construction, bridges, pipelines, dams, industrial infrastructure and related projects.
Ordinary taxable construction services generally attract 18% GST.
Certain specifically notified works contracts may qualify for concessional rates, such as eligible predominantly earthwork contracts supplied to specified government or local-authority recipients.
The concessional rate must be verified against the current notification and the exact contract conditions.
GST on Works Contract Services
A works contract under GST generally involves construction, installation, renovation, repair or similar activities relating to immovable property, where the contract includes the transfer of property in goods.
Works contracts are treated as supplies of services under GST.
For example, a contractor constructing a commercial building using both materials and labour generally provides a works contract service.
Ordinary taxable works contracts generally attract 18% GST, unless a specific concessional rate or exemption applies.
The GST treatment depends on the nature of the project and the relevant notification, not merely on whether the customer is a government organisation or private business.
Is GST Applicable on Construction Labour Charges?
Construction labour charges may be taxable or exempt depending on the type of service.
Pure-labour contracts for the construction, erection, commissioning or installation of original works pertaining to a single residential unit that is not part of a residential complex may qualify for exemption.
Certain pure-labour contracts under specified housing schemes may also qualify for exemption.
However, labour charges for ordinary commercial construction or other non-exempt construction services generally attract GST under the applicable construction-service entry.
Businesses should distinguish pure-labour contracts from works contracts that include both materials and labour.
GST Calculation Example for Construction Services
Suppose a contractor charges ₹5,00,000 for a taxable commercial construction service attracting 18% GST.
| Particular | Amount |
|---|---|
| Construction service charges | ₹5,00,000 |
| GST at 18% | ₹90,000 |
| Total invoice value | ₹5,90,000 |
For an intra-state supply, GST consists of ₹45,000 CGST and ₹45,000 SGST.
For an inter-state supply, ₹90,000 IGST generally applies, subject to the place-of-supply provisions.
This example assumes an ordinary taxable construction contract. Special residential real estate rates and exempt construction services require separate treatment.
Difference Between Construction, Repair and Installation Services
Construction-related activities may fall under different SAC codes depending on the work performed.
| Service | SAC code |
|---|---|
| Construction of residential buildings | 995411 |
| Construction of commercial buildings | 995414 |
| Repair and renovation of buildings | 995419 |
| Electrical installation forming part of construction | 995461 |
| Plumbing installation forming part of construction | 995462 |
| Heating, ventilation and air-conditioning installation forming part of construction | 995463 |
| Lift and escalator installation forming part of construction | 995466 |
Standalone equipment installation that does not form part of construction may fall under a different SAC heading, such as 9987.
The classification should reflect the actual service rather than the general description used on the invoice.
How to Identify the Correct SAC Code for Construction Services
Businesses should first identify the nature of the construction work.
For residential, commercial or industrial buildings, select the relevant six-digit code under SAC group 99541.
For roads, bridges, pipelines and other civil engineering works, identify the appropriate code under group 99542.
For specialised construction, installation, renovation or finishing activities, use the corresponding classification under heading 9954.
Next, review the contract to determine whether it is a works contract, a pure-labour service or a qualifying promoter supply.
Finally, verify the applicable GST rate, exemption conditions and invoice requirements using the latest official GST notifications.
FAQs About Construction Services SAC Codes
What is the SAC code for construction services?
The SAC heading for construction services is 9954. Specific services use six-digit codes, such as 995411 for residential buildings and 995414 for commercial buildings.
What is the GST rate on construction services?
Ordinary taxable construction services generally attract 18% GST. Qualifying residential real estate projects, specified works contracts and certain pure-labour services may have different rates or exemptions.
What is the SAC code for residential building construction?
The SAC code for construction of single-dwelling, multi-dwelling and multi-storey residential buildings is 995411.
What is the SAC code for commercial building construction?
The SAC code for construction of commercial buildings, including offices, malls, hotels and similar buildings, is 995414.
Is GST applicable on construction labour charges?
GST depends on the type of labour contract. Certain qualifying pure-labour contracts for a single residential unit or specified housing schemes are exempt, while other construction labour services may be taxable.
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Construction contractors and service providers need accurate records of project charges, applicable GST, customer payments and outstanding balances.
With myBillBook billing software, businesses can create GST invoices, maintain customer records and track payments.
Selecting the correct SAC code helps maintain accurate billing records for construction projects and related services.
Official Sources
- GST Council – Scheme of Classification of Services
- GST Council – Explanatory Notes to the Scheme of Classification of Services
- CBIC – GST Rates for Goods and Services
- CBIC – Exemption Notification 12/2017
- GST Portal – Search HSN/SAC Code
Last Reviewed: 22 October 2026
