SAC codes
SAC code for labour contracts: 995411
A labour contractor who builds with the client's cement, steel and bricks supplies a construction service, not manpower, so the code comes from the building type under 9954.
In short
A pure labour contract for building work goes under the 9954 construction codes, 995411 for residential buildings, usually at 18%, with an exemption for a single house. SimpleERP prints the SAC on each line and splits the tax.
Illustration of GST tax invoice INV-2026-27-0213 to Ravi Stores with CGST 9% and SGST 9%, round off, a UPI QR code and the amount in words.
The data
SAC 995411 at a glance
| Item | Value |
|---|---|
| 6-digit SAC | 995411 (residential buildings; 995413 industrial, 995414 commercial) |
| 4-digit group | 9954: construction services |
| Chapter 99 heading | Construction services of single dwelling or multi dwelling or multi-storied residential buildings |
| Usual GST rate | 18% on pure labour for most buildings (as notified; check the GST portal) |
| Reverse charge | Forward charge for most suppliers: the labour contractor charges GST |
| Exemption | Pure labour contracts for a single residential unit, not part of a residential complex, are exempt as notified |
| Who typically bills it | Masonry, plastering, tiling and civil labour contractors working with the client's material |
Sources: CBIC: classification of services (SAC), CBIC: GST rates and notifications. Verified .
Which SAC code goes on a labour contract invoice?
For a pure labour contract on a residential building use 995411, construction services of single dwelling or multi dwelling or multi-storied residential buildings. It sits in group 9954, construction services, under chapter 99 (services). The building decides the six digits: 995413 for an industrial building such as a factory shed, 995414 for a commercial building.
Two codes get mixed up here. A labour contract is a defined piece of work, such as the brickwork and plastering of a house, done with the client's material and priced per square foot or per job. Manpower supply is headcount, such as ten helpers sent to a client who directs their work, and goes under 998519 on the manpower supply page. Murugan Builders, a labour contractor in Madurai, Tamil Nadu, billing a house owner for masonry labour, uses 995411.
What GST rate applies to a labour contract?
Pure labour for building work is usually taxed at 18%, as CGST and SGST when the site is in your state. A ₹2,50,000 labour bill for a commercial building carries ₹45,000 of GST. The place of supply for building work is where the site is. Rates change, so confirm the rate for your goods or services with your CA or the GST portal before you rely on it.
- Labour plus material is a works contract, covered on the works contract page
- Labour for a single independent house is exempt as notified
- Some government and affordable housing projects have their own entries
- Headcount supply without a defined job is manpower under 998519
A labour contract invoice line in SimpleERP
Save the labour as a service with SAC 995411 and a unit such as square feet or Nos. For an exempt single house, save a second service with the No tax rate so that bill shows no GST.
- SAC 995411 prints on each labour line
- Place of supply picks CGST plus SGST or IGST from the customer's state
- Taxable and exempt labour stay apart in the HSN/SAC summary for GSTR-1
- Running bills per stage keep their own invoice numbers in the April to March series
Illustration of the keyboard-first invoice editor with a focused line, live tax totals and shortcut hints.
When is reverse charge or an exemption involved?
Construction labour is billed under forward charge: the contractor charges GST and pays it. The exemption that comes up most is the single residential unit: pure labour for construction, erection, commissioning or installation of original works on one independent house, not part of a residential complex, is exempt as notified. A flat in an apartment project does not qualify.
- Forward charge on labour contracts in the usual case
- Single independent house: exempt as notified
- Apartment complexes and commercial buildings: taxable
- Unregistered small contractors below the threshold do not charge GST at all
FAQ
Questions, answered
I supply only labour for building work. Should I use 998519 or 995411?
If you take responsibility for a defined job, such as brickwork for a house at a rate per square foot, that is a construction service under 9954, so 995411 for a residential building. If you only send workers who the client supervises and pay them per day, that is manpower supply under 998519. Ask your CA when a contract mixes both.
My client is building one independent house. Do I charge GST on my labour?
A pure labour contract for the original construction of a single residential unit, not part of a residential complex, is exempt as notified. Bill it without tax and keep the contract that shows it is labour only. Repairs or a flat inside a complex do not fit this exemption.
I also buy some sand and binding wire for the job. Is it still a labour contract?
Once you supply material as part of the job, it can become a works contract with its own rate and code. Small consumables may not change that, but the line is drawn by the contract terms. Check with your CA before you bill a job that mixes labour and material.
Can I bill labour for two sites on one invoice?
Better not. The place of supply for building work is the site, so each site gets its own invoice. In SimpleERP you raise one invoice per site, and the sales register still shows each customer's total for the month.
Related
Keep reading
GST billing for contractors
Running bills as invoices against the contract's sales order, SAC 9954 lines, and place of supply taken from the site address.
Read moreGST invoice for contractors
A free tax invoice format for works contracts and labour bills, with SAC 9954, the site address and place of supply.
Read moreSAC code
The code that classifies services for GST, as HSN codes do for goods.
Read more
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