Home / GST Invoice Format / Services

Service Provider Ka GST Invoice — SAC Codes Aur Format Guide

IT services 998314-18%, consulting 998311-18%, legal 998212-18%, accounting 998221-18%, advertising 998361-18%, transportation 996511-5/12%. Reverse charge mechanism explained. GSTBill handles all.

Service Provider GST Invoice Basics

Service sector invoicing follows different rules than goods — no HSN codes, but SAC (Service Accounting Code) instead. IT services, consulting, legal, accounting, transportation — each has a different SAC code and tax rate.

Plus: reverse charge mechanism applies — if the buyer is GST-registered and service value exceeds ₹5000, the buyer pays tax, not the seller. GSTBill automatically handles this.

Common Service SAC Codes & GST Rates

Service Type SAC Code GST Rate Notes
IT Services (software development, IT consulting) 998314 18% Web development, mobile apps
Business Consulting 998311 18% Management, strategy
Legal Services 998212 18% Lawyers, legal advice
Accounting & Bookkeeping 998221 18% CA services, auditing
Advertising Services 998361 18% Ad agencies, campaigns
Transportation (road freight) 996511 5% Goods transport
Logistics Services 996511 5% Warehousing, packing
Work Contract (construction) 996511 12% Labor + materials
Rental Services 996719 18% Equipment, space rental

Service Invoice vs Goods Invoice — Key Differences

  • Goods Invoice: HSN code required (6-digit)
  • Service Invoice: SAC code required (6-digit), different coding system
  • Goods: Tax based on product type
  • Service: Tax based on service nature. 18% standard (most), 5% transport only
  • Reverse Charge: Goods 0% for small suppliers, Services 100% if value > ₹5000 to GST-registered buyer
  • Description: Goods = product name, Service = service description (e.g., "Website Development - 3 pages")

Reverse Charge Mechanism (Service)

When applies: Service value > ₹5000 AND buyer is GST-registered

Who pays tax: Buyer pays, not seller

Invoice format: Invoice marked "Service recipient liable for GST under reverse charge"

Example: Freelancer provides ₹10,000 service to ABC Ltd (GSTIN). ABC Ltd pays ₹10,000 + ₹1,800 GST (reverse charge) = ₹11,800. GSTBill automatically detects and handles this.

Service Invoice Sample — GSTBill Format

Service Provider: XYZ IT Consulting, GSTIN 27XXXXX

Service Recipient: ABC Corp, GSTIN 27YYYYY

Service Description: Website Development Project (50 hours @ ₹200/hour) = ₹10,000

Tax Calculation:

  • SAC Code: 998314
  • Reverse Charge Applicable (service > ₹5000, buyer GST-registered)
  • Tax Due: ₹1,800 (18%) payable by ABC Corp on purchase invoice
  • Seller Invoice Total: ₹10,000 (no GST charged)

Get Started — Free Service GST Invoicing

Start on WhatsApp Try Web Version

Service Provider GST FAQ

What is reverse charge in services? +
Reverse charge: If service value exceeds ₹5000 and the buyer is GST-registered, tax responsibility shifts to the buyer. The seller does not charge GST; the buyer claims it in their purchase GST return. GSTBill automatically detects this condition and marks "Reverse Charge Applicable" on the invoice.
What is the difference between SAC code and HSN code? +
HSN (Harmonized System of Nomenclature) = For goods (6-digit code). SAC (Service Accounting Code) = For services (6-digit code). The coding system and tax rates differ. GSTBill differentiates between both automatically — select the invoice type (goods or service), and all fields auto-populate.
Why is transportation service GST 5% while others are 18%? +
Government incentive: Transportation (an essential service) is taxed at 5%. Other professional services like IT, legal, and accounting provide higher-value services, so they are taxed at the standard 18%. Some services involving both work and materials are taxed at 12%.
How are freelancer invoices created in GST? +
If a freelancer is GSTIN-registered (annual revenue exceeds ₹40 lakhs), they must issue tax invoices. Use the appropriate SAC code (for example, 998314 for IT/consulting services). If the buyer is GST-registered, mark reverse charge on the invoice. GSTBill is the perfect solution for freelancers.
How is a service recipient liability invoice prepared? +
Clearly mark on the invoice: "Service recipient liable for GST under reverse charge mechanism". GSTBill automatically adds this when conditions match. Enter the buyer's GSTIN and if the value exceeds ₹5000, reverse charge is automatically flagged.
What happens with B2C service invoices (consumer)? +
B2C transactions do not involve reverse charge. A regular tax invoice is issued, and the service provider charges GST directly to the consumer. For example: A plumber provides ₹1000 in service > Bill = ₹1000 + ₹180 GST (18%) = ₹1180 total customer payment.
What about composite services (labor plus material)? +
Composite services (construction work contracts): First identify the dominant component. If materials exceed 50%, apply goods tax. If services exceed 50%, apply service tax (work contracts typically are 12%). GSTBill has built-in dominance logic to handle this automatically.