A Services Accounting Code (SAC) classifies services under GST, much as an HSN code classifies goods. Each service category has a SAC that determines its GST rate and how it is reported in returns.
Service businesses — agencies, consultants, transporters and the like — select the right SAC on each invoice so the tax and the GSTR-1 summary are correct.
SAC codes are six digits and every one of them begins with 99, the chapter reserved for services in the GST classification scheme. The middle pair narrows to the service group — construction, transport, professional services and so on — and the final pair pins the specific service. So two codes sharing four leading digits are close cousins, and the scheme's published explanatory notes describe what each heading does and does not cover.
Rates and exemptions for services are notified against this classification: a heading can carry a standard rate, a concessional rate with conditions, or a full exemption — healthcare and education being familiar examples of exempt headings. The same code then drives reporting: it appears in the e-invoice payload where mandated, and in the summary table of GSTR-1, so the code chosen at quotation stage echoes through billing and returns.
In practice the failure mode is coarseness: a firm sets one generic SAC on day one and bills every engagement against it, even as its work drifts across consulting, licensing and support — headings that may carry different treatment. Each engagement type deserves its own service item with the correct code, and the service list deserves a review whenever a new line of work begins; classification is a living decision, not a setup-day chore.