The SAC code for installation charges is 9987, with 99873 covering installation services other than construction. These services generally attract 18% GST in India. The exact six-digit SAC depends on the equipment being installed, such as computers, industrial machinery, communication devices or electrical equipment.
Installation charges use a SAC (Services Accounting Code), not an HSN code, because installation is a service.
What Is the SAC Code for Installation Charges?
Installation services that do not form part of construction work are classified under SAC group 99873, within heading 9987.
This includes installing and setting up machinery, computers, electronic equipment and other qualifying goods.
| Particular | Details |
|---|---|
| Service | Installation charges |
| SAC heading | 9987 |
| SAC group | 99873 |
| Category | Installation services other than construction |
| General GST rate | 18% |
| CGST + SGST | 9% + 9% |
| IGST | 18% |
The precise SAC code depends on the equipment or goods being installed.
SAC Codes for Different Types of Installation Services
The official GST classification provides separate codes for different installation services.
| Installation service | SAC code | General GST rate |
|---|---|---|
| Fabricated metal products, excluding machinery and equipment | 998731 | 18% |
| Industrial and manufacturing machinery and equipment | 998732 | 18% |
| Office machinery, accounting equipment and computers | 998733 | 18% |
| Radio, television and communication equipment | 998734 | 18% |
| Medical machinery, precision and optical instruments | 998735 | 18% |
| Other electrical machinery and apparatus | 998736 | 18% |
| Other goods not classified elsewhere | 998739 | 18% |
These codes apply to qualifying standalone installation services outside construction. The actual service contract must be reviewed before selecting a code.
GST Rate on Installation Charges in India
Standalone installation services classified under SAC 9987 generally attract 18% GST.
For an intra-state transaction, GST is divided into 9% CGST and 9% SGST.
For an inter-state transaction, 18% IGST generally applies, subject to the relevant place-of-supply rules.
However, installation charges may receive different GST treatment when they form part of a composite supply of goods or a construction contract.
GST on Machinery Installation Charges
Installation of industrial machinery and equipment generally falls under SAC 998732 when supplied as a standalone installation service outside construction.
For example, a technician installing industrial equipment under a separate service contract may use this classification.
The general GST rate is 18%.
GST on Computer Installation Charges
Installation of computers, office machinery and accounting equipment generally falls under SAC 998733.
This can include qualifying installation and setup services for computer equipment.
The general GST rate is 18%.
GST on Electrical Equipment Installation Charges
Installation of electrical machinery and apparatus not covered by a more specific installation category may fall under SAC 998736.
However, electrical installation work forming part of a building or construction project may fall under SAC 9954 instead.
GST Calculation Example for Installation Charges
Suppose a service provider charges ₹15,000 for installing industrial equipment under a standalone service contract.
| Particular | Amount |
|---|---|
| Installation charges | ₹15,000 |
| GST at 18% | ₹2,700 |
| Total invoice value | ₹17,700 |
For an intra-state transaction, the GST consists of ₹1,350 CGST and ₹1,350 SGST.
For an inter-state transaction, ₹2,700 IGST generally applies, subject to place-of-supply rules.
This example assumes that the installation is an independent taxable service under SAC 9987.
Are Installation Charges Taxed Separately from Goods?
Installation charges are not always treated as a separate service for GST purposes.
When a business sells goods and also installs them, the tax treatment depends on the contract and whether the transaction constitutes a composite supply.
For example, if equipment is sold with installation as an ancillary part of a single composite supply, the GST treatment may follow the principal supply.
However, if a customer separately engages a service provider for installation, the installation service may be classified independently under the relevant SAC.
Businesses should evaluate the nature of the transaction rather than automatically applying SAC 9987 to every installation charge.
Difference Between Installation Services and Construction Services
Not all installation activities fall under SAC 9987.
Installation work that forms part of construction may be classified under SAC 9954.
| Type of service | Relevant SAC |
|---|---|
| Standalone machinery installation outside construction | 998732 |
| Standalone computer installation | 998733 |
| Standalone communication equipment installation | 998734 |
| Electrical installation work forming part of construction | 995461 |
| Plumbing installation forming part of construction | 995462 |
| HVAC installation forming part of construction | 995463 |
| Lift and escalator installation forming part of construction | 995466 |
The distinction matters because construction-related installation may be subject to different GST provisions depending on the contract.
How to Identify the Correct SAC Code for Installation Charges
Businesses should first identify the equipment or system being installed.
Next, determine whether the installation is an independent service, part of a goods supply or part of construction work.
For standalone installation services outside construction, select the relevant six-digit code under SAC group 99873.
For construction-related installation, check the appropriate classification under SAC 9954.
Finally, verify the applicable GST rate and place-of-supply treatment before preparing the invoice.
Frequently Asked Questions
What is the SAC code for installation charges?
The SAC heading for installation charges is 9987, with group 99873 covering installation services other than construction. The exact six-digit code depends on the equipment installed.
What is the GST rate on installation charges?
Standalone installation services under SAC 9987 generally attract 18% GST. Different treatment may apply when installation forms part of a composite supply or construction contract.
What is the SAC code for machinery installation?
Standalone installation of industrial and manufacturing machinery generally falls under SAC 998732.
What is the SAC code for computer installation?
Installation of office machinery, accounting equipment and computers generally falls under SAC 998733.
Official Sources
- GST Council – Scheme of Classification of Services
- GST Council – Explanatory Notes to the Scheme of Classification of Services
- CBIC – GST Goods and Services Rates
- CBIC – Central Goods and Services Tax Act, 2017
- GST Portal – Search HSN/SAC Code
Last Reviewed: 21 October 2026
