{"id":11163,"date":"2026-10-22T12:26:18","date_gmt":"2026-10-22T12:26:18","guid":{"rendered":"https:\/\/mybillbook.in\/blog\/?page_id=11163"},"modified":"2026-10-22T12:35:25","modified_gmt":"2026-10-22T12:35:25","slug":"software-development-services","status":"publish","type":"page","link":"https:\/\/mybillbook.in\/blog\/sac-code\/software-development-services\/","title":{"rendered":"Software Development Services SAC Code &amp; GST Rate in India"},"content":{"rendered":"<p>\n\n\n<p class=\"wp-block-paragraph\">The <strong>SAC code for software development services is 998314<\/strong>, and the general GST rate is <strong>18% in India<\/strong>. This code covers information technology design and development services, including custom software, website development, application development, database design and software integration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Software development services are classified under SAC (Services Accounting Code), not HSN, because they involve providing services rather than supplying goods.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is the SAC Code for Software Development Services?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Software development services fall under <strong>SAC 998314 \u2013 Information Technology (IT) Design and Development Services<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This classification covers businesses and professionals who design, develop, customise or integrate software solutions for clients.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th>Particular<\/th><th>Details<\/th><\/tr><tr><td>Service<\/td><td>Software development services<\/td><\/tr><tr><td>SAC code<\/td><td><strong>998314<\/strong><\/td><\/tr><tr><td>Official description<\/td><td>Information technology design and development services<\/td><\/tr><tr><td>SAC group<\/td><td>99831<\/td><\/tr><tr><td>SAC heading<\/td><td>9983<\/td><\/tr><tr><td>General GST rate<\/td><td><strong>18%<\/strong><\/td><\/tr><tr><td>CGST + SGST<\/td><td>9% + 9%<\/td><\/tr><tr><td>IGST<\/td><td>18%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The classification applies to qualifying development services provided by software companies, IT agencies and independent developers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Services Covered Under SAC 998314<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">SAC 998314 covers different types of software design, development and implementation work.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th>Software development service<\/th><th>Examples<\/th><th>SAC code<\/th><th>General GST rate<\/th><\/tr><tr><td>Custom software development<\/td><td>Building software according to a client&#8217;s business requirements<\/td><td>998314<\/td><td>18%<\/td><\/tr><tr><td>Website development<\/td><td>Designing and developing websites or web applications<\/td><td>998314<\/td><td>18%<\/td><\/tr><tr><td>Mobile application development<\/td><td>Developing Android, iOS or cross-platform applications<\/td><td>998314<\/td><td>18%<\/td><\/tr><tr><td>Database development<\/td><td>Designing database structures and related applications<\/td><td>998314<\/td><td>18%<\/td><\/tr><tr><td>Software customisation<\/td><td>Modifying an existing application for a client&#8217;s requirements<\/td><td>998314<\/td><td>18%<\/td><\/tr><tr><td>Software integration<\/td><td>Integrating applications, databases or business systems<\/td><td>998314<\/td><td>18%<\/td><\/tr><tr><td>IT solution design<\/td><td>Designing custom software systems and technical solutions<\/td><td>998314<\/td><td>18%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">These services fall under SAC 998314 when the primary activity is IT design, development or qualifying customisation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">GST Rate on Software Development Services in India<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Software development services classified under SAC 998314 generally attract <strong>18% GST<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For intra-state transactions, the applicable tax is divided into:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>9% CGST<\/strong><\/li>\n\n\n\n<li><strong>9% SGST<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For inter-state transactions, <strong>18% IGST<\/strong> generally applies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the GST treatment can differ for qualifying exports of services, supplies to Special Economic Zones (SEZs) and other transactions covered by specific GST provisions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">GST on Custom Software Development<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Custom software development generally falls under SAC 998314.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if a software company develops an inventory management application specifically for a retailer, the development service would ordinarily be classified under this code.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The general GST rate is 18% for a taxable domestic supply.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">GST on Website and Mobile App Development<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Website and mobile application development also fall under SAC 998314 when the engagement involves designing or developing a software application.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This includes developing custom websites, mobile apps and web-based business systems.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The general GST rate is 18% for taxable domestic services.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">GST on Software Customisation and Integration<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Customising existing software or integrating applications with a client&#8217;s systems can also fall under SAC 998314.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, modifying an existing business application to work with a client&#8217;s database may qualify as an IT design and development service.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, routine technical support or maintenance without development work may require a different classification.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">GST Calculation Example for Software Development Services<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose a software development company charges \u20b91,00,000 for building a custom business application for an Indian client.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th>Particular<\/th><th class=\"has-text-align-right\" data-align=\"right\">Amount<\/th><\/tr><tr><td>Software development charges<\/td><td class=\"has-text-align-right\" data-align=\"right\">\u20b91,00,000<\/td><\/tr><tr><td>GST at 18%<\/td><td class=\"has-text-align-right\" data-align=\"right\">\u20b918,000<\/td><\/tr><tr><td>Total invoice value<\/td><td class=\"has-text-align-right\" data-align=\"right\"><strong>\u20b91,18,000<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">For an intra-state transaction, the GST consists of \u20b99,000 CGST and \u20b99,000 SGST.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For an inter-state transaction, \u20b918,000 IGST generally applies, subject to the place-of-supply provisions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This calculation assumes a taxable domestic software development service.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Difference Between Software Development and Other IT Services<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Not every software-related activity falls under SAC 998314.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The correct classification depends on the actual nature of the service.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th>IT service<\/th><th>SAC code<\/th><th>Classification<\/th><\/tr><tr><td>Custom software and application development<\/td><td><strong>998314<\/strong><\/td><td>IT design and development services<\/td><\/tr><tr><td>IT consulting and technical support<\/td><td><strong>998313<\/strong><\/td><td>IT consulting and support services<\/td><\/tr><tr><td>Hosting and IT infrastructure provisioning<\/td><td><strong>998315<\/strong><\/td><td>Hosting and IT infrastructure provisioning services<\/td><\/tr><tr><td>IT infrastructure and network management<\/td><td><strong>998316<\/strong><\/td><td>IT infrastructure and network management services<\/td><\/tr><tr><td>Licensing the right to use computer software and databases<\/td><td><strong>997331<\/strong><\/td><td>Intellectual property licensing services<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">For example, developing a new application generally falls under SAC 998314.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, providing technical support for an existing application may fall under SAC 998313.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly, granting software usage rights without performing development work may require classification under the relevant licensing provisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is GST Applicable on Software Development Services Exported from India?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Software development services supplied to overseas clients may qualify as <strong>exports of services<\/strong> under GST when all statutory conditions are satisfied.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Qualifying exports are zero-rated supplies under the IGST Act.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A registered exporter may generally supply eligible services under a Letter of Undertaking (LUT) without payment of integrated tax, subject to the applicable rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, receiving payment from a foreign client does not automatically make the transaction an export of services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The supplier must satisfy the applicable conditions, including the location of the recipient, place of supply and other requirements under the IGST Act.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Identify the Correct SAC Code for Software Services<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses should identify the primary service provided to the client before selecting a SAC code.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the engagement involves designing, coding, developing, customising or integrating a software application, SAC 998314 generally applies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the work mainly involves IT consulting, troubleshooting, hosting, network management or licensing, a different SAC may be appropriate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The service agreement, statement of work and invoice description should accurately reflect the nature of the supply.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses can verify the classification using the official GST Portal&#8217;s HSN\/SAC search facility.<\/p>\n\n\n\t\t<div class=\"wp-faq-schema-wrap\">\n\t\t\t\t\t\t\t<h2>Frequently Asked Questions<\/h2>\n\t\t\t\t\t\t<div class=\"wp-faq-schema-items\">\n\t\t\t\t\t\t\t\t\t<h3>What is the SAC code for software development services?<\/h3>\n\t\t\t\t\t<div class=\"\">\n\t\t\t\t\t\t<p>The SAC code for software development services is 998314. It covers IT design and development services, including custom applications, websites, databases and software integration.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<h3>What is the GST rate on software development services?<\/h3>\n\t\t\t\t\t<div class=\"\">\n\t\t\t\t\t\t<p>Software development services under SAC 998314 generally attract 18% GST in India for taxable domestic supplies.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<h3>What is the SAC code for website development?<\/h3>\n\t\t\t\t\t<div class=\"\">\n\t\t\t\t\t\t<p>Website development generally falls under SAC 998314 when the service involves designing, coding or developing a website or web application.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<h3>Is GST charged on software development services provided to foreign clients?<\/h3>\n\t\t\t\t\t<div class=\"\">\n\t\t\t\t\t\t<p>Qualifying exports of software development services are zero-rated under GST. However, all applicable export-of-services conditions must be satisfied before treating a transaction as zero-rated.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n\n\n\n<h2 class=\"wp-block-heading\">Official Sources<\/h2>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.gstcouncil.gov.in\/sites\/default\/files\/2024-02\/scheme_of_classification_of_services_amended.pdf\">GST Council \u2013 Scheme of Classification of Services<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.gstcouncil.gov.in\/sites\/default\/files\/2024-02\/explanatory_notes_01oct19.pdf\">GST Council \u2013 Explanatory Notes to the Scheme of Classification of Services<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/cbic-gst.gov.in\/hindi\/gst-goods-services-rates.html\">CBIC \u2013 GST Rates for Goods and Services<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/cbic-gst.gov.in\/IGST-bill-e.html\">CBIC \u2013 Integrated Goods and Services Tax Act, 2017<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/services.gst.gov.in\/services\/searchhsnsac\">GST Portal \u2013 Search HSN\/SAC Code<\/a><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Last Reviewed: 22 October 2026<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The SAC code for software development services is 998314, and the general GST rate is 18% in India. This code [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":0,"parent":11106,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"no-sidebar","site-content-layout":"plain-container","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"disabled","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"class_list":["post-11163","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Software Development SAC Code &amp; GST Rate<\/title>\n<meta name=\"description\" content=\"Check software development SAC code 998314 and 18% GST rate in India. 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