{"id":7219,"date":"2024-01-11T10:58:21","date_gmt":"2024-01-11T10:58:21","guid":{"rendered":"https:\/\/mybillbook.in\/blog\/?page_id=7219"},"modified":"2026-10-22T13:55:50","modified_gmt":"2026-10-22T13:55:50","slug":"construction-services","status":"publish","type":"page","link":"https:\/\/mybillbook.in\/blog\/sac-code\/construction-services\/","title":{"rendered":"SAC Code for Construction Services"},"content":{"rendered":"\n

The SAC code for construction services is 9954<\/strong>, and the general GST rate is 18% in India<\/strong>. However, certain residential construction projects, eligible works contracts and specified labour-only construction services may attract different GST rates or qualify for exemptions.<\/p>\n\n\n\n

Construction services use SAC (Services Accounting Code)<\/strong> rather than HSN, as HSN codes classify goods. The exact six-digit SAC code depends on the type of construction activity.<\/p>\n\n\n\n

What Is the SAC Code for Construction Services?<\/h2>\n\n\n\n

Construction services fall under SAC heading 9954<\/strong>, which covers the construction of buildings, civil engineering works, specialised construction activities, and related repairs or renovations.<\/p>\n\n\n\n

Particular<\/th>Details<\/th><\/tr><\/thead>
Service<\/td>Construction services<\/td><\/tr>
SAC heading<\/td>9954<\/strong><\/td><\/tr>
Classification<\/td>Construction services<\/td><\/tr>
General GST rate<\/td>18%<\/strong><\/td><\/tr>
CGST + SGST<\/td>9% + 9%<\/td><\/tr>
IGST<\/td>18%<\/td><\/tr>
Other applicable rates<\/td>Project-specific rates or exemptions may apply<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

SAC 9954 is the broad classification. Businesses should select the appropriate six-digit SAC code based on the actual construction service provided.<\/p>\n\n\n\n

SAC Codes for Different Types of Construction Services<\/h2>\n\n\n\n

The official GST classification includes separate codes for residential buildings, commercial buildings, industrial structures and civil engineering works.<\/p>\n\n\n\n

Construction service<\/th>SAC code<\/th><\/tr><\/thead>
Construction of single or multi-storey residential buildings<\/td>995411<\/strong><\/td><\/tr>
Construction of hostels, old-age homes and other residential buildings<\/td>995412<\/strong><\/td><\/tr>
Construction of factories, workshops and industrial buildings<\/td>995413<\/strong><\/td><\/tr>
Construction of offices, malls, hotels and other commercial buildings<\/td>995414<\/strong><\/td><\/tr>
Construction of hospitals, schools and other non-residential buildings<\/td>995415<\/strong><\/td><\/tr>
Construction of other buildings not elsewhere classified<\/td>995416<\/strong><\/td><\/tr>
Repair, renovation and remodelling of buildings<\/td>995419<\/strong><\/td><\/tr>
Construction of roads, bridges, railways and tunnels<\/td>995421<\/strong><\/td><\/tr>
Construction of dams, waterways and irrigation works<\/td>995422<\/strong><\/td><\/tr>
Construction of pipelines, power lines and related infrastructure<\/td>995423<\/strong><\/td><\/tr>
Construction of local water, sewage and electricity networks<\/td>995424<\/strong><\/td><\/tr>
Construction of mines and industrial plants<\/td>995425<\/strong><\/td><\/tr>
Construction of power plants and related infrastructure<\/td>995426<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

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.<\/p>\n\n\n\n

GST Rate on Construction Services in India<\/h2>\n\n\n\n

Construction services do not have one uniform GST rate. The applicable rate depends on the project, contract structure, recipient and relevant GST notification.<\/p>\n\n\n\n

Type of construction service<\/th>General GST treatment<\/th><\/tr><\/thead>
Ordinary taxable construction services<\/td>18%<\/strong><\/td><\/tr>
Construction of affordable residential apartments by a promoter under the applicable new-rate scheme<\/td>1% effective GST<\/strong>, subject to conditions<\/td><\/tr>
Construction of other residential apartments by a promoter under the applicable new-rate scheme<\/td>5% effective GST<\/strong>, subject to conditions<\/td><\/tr>
Certain commercial apartments in qualifying residential real estate projects<\/td>5% effective GST<\/strong>, subject to conditions<\/td><\/tr>
Eligible predominantly earthwork contracts for specified government or local-authority recipients<\/td>12%<\/strong>, subject to conditions<\/td><\/tr>
Certain qualifying pure-labour construction contracts<\/td>Exempt<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The effective residential apartment rates generally operate without input tax credit and under prescribed valuation and other conditions.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

GST on Residential Construction Services<\/h3>\n\n\n\n

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.<\/p>\n\n\n\n

Qualifying affordable residential apartments under the applicable promoter scheme generally attract an effective GST rate of 1%.<\/p>\n\n\n\n

Other qualifying residential apartments generally attract an effective rate of 5%.<\/p>\n\n\n\n

However, an independent contractor constructing a house for a landowner does not automatically qualify for these promoter rates. The contract must be classified separately.<\/p>\n\n\n\n

GST on Commercial Construction Services<\/h3>\n\n\n\n

Commercial construction services include the construction of offices, shopping complexes, hotels, warehouses and similar buildings.<\/p>\n\n\n\n

Ordinary taxable commercial construction contracts generally attract 18% GST<\/strong>.<\/p>\n\n\n\n

Certain commercial apartments forming part of qualifying residential real estate projects may receive different treatment under the prescribed real estate provisions.<\/p>\n\n\n\n

GST on Civil Engineering and Infrastructure Construction<\/h3>\n\n\n\n

Civil engineering services include road construction, bridges, pipelines, dams, industrial infrastructure and related projects.<\/p>\n\n\n\n

Ordinary taxable construction services generally attract 18% GST.<\/p>\n\n\n\n

Certain specifically notified works contracts may qualify for concessional rates, such as eligible predominantly earthwork contracts supplied to specified government or local-authority recipients.<\/p>\n\n\n\n

The concessional rate must be verified against the current notification and the exact contract conditions.<\/p>\n\n\n\n

GST on Works Contract Services<\/h2>\n\n\n\n

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.<\/p>\n\n\n\n

Works contracts are treated as supplies of services under GST.<\/p>\n\n\n\n

For example, a contractor constructing a commercial building using both materials and labour generally provides a works contract service.<\/p>\n\n\n\n

Ordinary taxable works contracts generally attract 18% GST<\/strong>, unless a specific concessional rate or exemption applies.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Is GST Applicable on Construction Labour Charges?<\/h2>\n\n\n\n

Construction labour charges may be taxable or exempt depending on the type of service.<\/p>\n\n\n\n

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<\/strong> may qualify for exemption.<\/p>\n\n\n\n

Certain pure-labour contracts under specified housing schemes may also qualify for exemption.<\/p>\n\n\n\n

However, labour charges for ordinary commercial construction or other non-exempt construction services generally attract GST under the applicable construction-service entry.<\/p>\n\n\n\n

Businesses should distinguish pure-labour contracts from works contracts that include both materials and labour.<\/p>\n\n\n\n

GST Calculation Example for Construction Services<\/h2>\n\n\n\n

Suppose a contractor charges \u20b95,00,000 for a taxable commercial construction service attracting 18% GST.<\/p>\n\n\n\n

Particular<\/th>Amount<\/th><\/tr><\/thead>
Construction service charges<\/td>\u20b95,00,000<\/td><\/tr>
GST at 18%<\/td>\u20b990,000<\/td><\/tr>
Total invoice value<\/td>\u20b95,90,000<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

For an intra-state supply, GST consists of \u20b945,000 CGST and \u20b945,000 SGST.<\/p>\n\n\n\n

For an inter-state supply, \u20b990,000 IGST generally applies, subject to the place-of-supply provisions.<\/p>\n\n\n\n

This example assumes an ordinary taxable construction contract. Special residential real estate rates and exempt construction services require separate treatment.<\/p>\n\n\n\n

Difference Between Construction, Repair and Installation Services<\/h2>\n\n\n\n

Construction-related activities may fall under different SAC codes depending on the work performed.<\/p>\n\n\n\n

Service<\/th>SAC code<\/th><\/tr><\/thead>
Construction of residential buildings<\/td>995411<\/strong><\/td><\/tr>
Construction of commercial buildings<\/td>995414<\/strong><\/td><\/tr>
Repair and renovation of buildings<\/td>995419<\/strong><\/td><\/tr>
Electrical installation forming part of construction<\/td>995461<\/strong><\/td><\/tr>
Plumbing installation forming part of construction<\/td>995462<\/strong><\/td><\/tr>
Heating, ventilation and air-conditioning installation forming part of construction<\/td>995463<\/strong><\/td><\/tr>
Lift and escalator installation forming part of construction<\/td>995466<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Standalone equipment installation that does not form part of construction may fall under a different SAC heading, such as 9987.<\/p>\n\n\n\n

The classification should reflect the actual service rather than the general description used on the invoice.<\/p>\n\n\n\n

How to Identify the Correct SAC Code for Construction Services<\/h2>\n\n\n\n

Businesses should first identify the nature of the construction work.<\/p>\n\n\n\n

For residential, commercial or industrial buildings, select the relevant six-digit code under SAC group 99541.<\/p>\n\n\n\n

For roads, bridges, pipelines and other civil engineering works, identify the appropriate code under group 99542.<\/p>\n\n\n\n

For specialised construction, installation, renovation or finishing activities, use the corresponding classification under heading 9954.<\/p>\n\n\n\n

Next, review the contract to determine whether it is a works contract, a pure-labour service or a qualifying promoter supply.<\/p>\n\n\n\n

Finally, verify the applicable GST rate, exemption conditions and invoice requirements using the latest official GST notifications.<\/p>\n\n\n\n

FAQs About Construction Services SAC Codes<\/h2>\n\n\n\n

What is the SAC code for construction services?<\/h3>\n\n\n\n

The SAC heading for construction services is 9954<\/strong>. Specific services use six-digit codes, such as 995411 for residential buildings and 995414 for commercial buildings.<\/p>\n\n\n\n

What is the GST rate on construction services?<\/h3>\n\n\n\n

Ordinary taxable construction services generally attract 18% GST<\/strong>. Qualifying residential real estate projects, specified works contracts and certain pure-labour services may have different rates or exemptions.<\/p>\n\n\n\n

What is the SAC code for residential building construction?<\/h3>\n\n\n\n

The SAC code for construction of single-dwelling, multi-dwelling and multi-storey residential buildings is 995411<\/strong>.<\/p>\n\n\n\n

What is the SAC code for commercial building construction?<\/h3>\n\n\n\n

The SAC code for construction of commercial buildings, including offices, malls, hotels and similar buildings, is 995414<\/strong>.<\/p>\n\n\n\n

Is GST applicable on construction labour charges?<\/h3>\n\n\n\n

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.<\/p>\n\n\n\n

Manage Construction Service Invoices with myBillBook<\/h2>\n\n\n\n

Construction contractors and service providers need accurate records of project charges, applicable GST, customer payments and outstanding balances.<\/p>\n\n\n\n

With myBillBook billing software<\/a>, businesses can create GST invoices, maintain customer records and track payments.<\/p>\n\n\n\n

Selecting the correct SAC code helps maintain accurate billing records for construction projects and related services.<\/p>\n\n\n\n

Official Sources<\/h2>\n\n\n\n
    \n
  1. GST Council \u2013 Scheme of Classification of Services<\/a><\/li>\n\n\n\n
  2. GST Council \u2013 Explanatory Notes to the Scheme of Classification of Services<\/a><\/li>\n\n\n\n
  3. CBIC \u2013 GST Rates for Goods and Services<\/a><\/li>\n\n\n\n
  4. CBIC \u2013 Exemption Notification 12\/2017<\/a><\/li>\n\n\n\n
  5. GST Portal \u2013 Search HSN\/SAC Code<\/a><\/li>\n<\/ol>\n\n\n\n

    Last Reviewed: 22 October 2026<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

    The SAC code for construction services is 9954, and the general GST rate is 18% in India. 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