The SAC code for financial and related services is 9971 under GST in India. Taxable services such as bank processing fees, financial advisory charges and brokerage generally attract 18% GST. However, qualifying interest on loans and deposits is exempt, and certain insurance and other financial services have specific GST exemptions.
What Is the SAC Code for Financial Services?
Financial services fall under SAC heading 9971, which covers banking, lending, investment banking, insurance, pension-related services and other financial activities.
SAC stands for Services Accounting Code. It is used to classify services for GST purposes, while HSN codes are primarily used for goods.
Heading 9971 includes several six-digit service codes. Businesses should select the code that matches the actual financial service being provided.
Financial Services SAC Code List
| SAC Code | Service Description |
|---|---|
| 997111 | Central banking services |
| 997112 | Deposit services |
| 997113 | Credit-granting services, including guarantees and securities |
| 997114 | Financial leasing services |
| 997119 | Other financial services |
| 997120 | Investment banking services |
| 997131 | Pension services |
| 997132 | Life insurance services |
| 997133 | Accident and health insurance services |
| 997134 | Motor vehicle insurance services |
| 997141 | Life reinsurance services |
| 997151 | Services related to investment banking, mergers and acquisitions, and corporate finance |
| 997152 | Brokerage and related securities and commodities services |
| 997153 | Portfolio management services, excluding pension funds |
| 997154 | Trust and custody services |
These codes form part of the official GST classification scheme. Other codes under Heading 9971 cover additional insurance, reinsurance and financial support activities.
GST Rate on Financial Services in India
Most taxable financial services under SAC 9971 attract 18% GST.
For intra-state transactions, the tax is generally divided into 9% CGST and 9% SGST. For inter-state transactions, 18% IGST generally applies.
However, the GST treatment depends on the nature of the financial service and the consideration charged.
Taxable and Exempt Financial Services
| Financial Service | General GST Treatment |
|---|---|
| Bank processing and documentation fees | 18% |
| Loan processing charges | 18% |
| Financial advisory fees | 18% |
| Securities brokerage services | 18% |
| Qualifying interest on loans and advances | Exempt |
| Qualifying interest on deposits | Exempt |
| Certain notified insurance schemes | Exempt, subject to conditions |
Important: An exemption for loan interest does not automatically extend to processing fees, administrative charges or other service fees collected by the lender.
Insurance services must also be checked against the applicable GST notifications because specific insurance products and schemes can receive different treatment.
Is GST Applicable to Loan Interest and Processing Fees?
Qualifying interest on loans, advances and deposits is generally exempt from GST under Notification No. 12/2017-Central Tax (Rate), as amended.
However, charges collected separately for providing financial services may be taxable.
For example:
Loan interest: Interest charged on a qualifying business loan is generally exempt from GST.
Loan processing fee: A processing fee charged by a lender generally attracts 18% GST.
Documentation charges: Separately charged documentation or administrative fees generally attract 18% GST.
CBIC has clarified that the exemption for interest or discount does not automatically cover other charges collected in connection with lending.
GST Calculation Example for Financial Services
Suppose a financial institution charges a business ₹5,000 as a taxable loan processing fee, excluding GST.
| Particular | Amount |
|---|---|
| Processing Fee | ₹5,000 |
| GST @ 18% | ₹900 |
| Total Amount | ₹5,900 |
For an intra-state supply, the GST comprises ₹450 CGST and ₹450 SGST.
This example applies to a taxable service fee, not to exempt loan interest.
Financial Services vs Accounting Services: SAC Code Difference
Financial services and professional accounting services are not classified under the same SAC heading.
Financial services under 9971 include banking, lending, investment banking, brokerage and insurance-related activities.
Accounting, bookkeeping and certain tax-related professional services generally fall under SAC heading 9982, which covers legal and accounting services.
For example, a bank charging a loan processing fee and an accountant charging for bookkeeping services are supplying different categories of services.
Businesses should classify the actual service performed rather than selecting SAC 9971 merely because the work involves money or financial records.
Frequently Asked Questions
What is the six-digit SAC code for banking services?
The relevant code depends on the banking activity. For example, deposit services fall under SAC 997112, while credit-granting services fall under SAC 997113.
Is GST on financial services 18%?
Most taxable financial services attract 18% GST. However, qualifying loan and deposit interest is exempt, and certain notified financial services have specific exemptions.
Is GST charged on loan interest?
Qualifying interest on loans and advances is generally exempt from GST. Separately charged processing, documentation and administrative fees may attract GST.
What is the SAC code for financial advisory services?
The code depends on the precise advisory activity. Investment banking and corporate finance advisory services may fall under SAC 997120 or relevant auxiliary financial service codes, while accounting and tax advisory services generally fall under Heading 9982.
Sources
- GST Council – Scheme of Classification of Services
- CBIC – GST Rates and Exemptions
- CBIC – Sectoral FAQs for Banking and Financial Services
- Notification No. 11/2017-Central Tax (Rate), as amended.
- Notification No. 12/2017-Central Tax (Rate), as amended.
Last Reviewed: 14 October 2026
