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SAC codes

SAC code for software development: 998314

Custom software, apps and web builds bill under one six-digit code. Here is the code, the usual rate and a milestone invoice line.

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In short

Software development is billed under SAC 998314, usually at 18% GST under forward charge. In SimpleERP the service carries the code and rate, and each milestone invoice picks IGST or CGST and SGST from the client's state.

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 998314 at a glance

ItemValue
6-digit SAC998314: Information technology (IT) design and development services
4-digit group9983
Chapter 99 headingOther professional, technical and business services
Usual GST rate18% under forward charge
Reverse chargeForward charge for most suppliers.
ExemptionNo exemption for domestic clients; development for a client outside India can be a zero-rated export, as notified.
Who typically bills itSoftware houses, app and web developers, freelance programmers
SAC 998314 as classified by CBIC, checked on the verified date below. Rates change, so confirm the rate for your goods or services with your CA or the GST portal before you rely on it.

Sources: CBIC: classification of services (SAC), CBIC: GST rates and notifications. Verified .

Which SAC code goes on a software development invoice?

The usual SAC code for software development is 998314: information technology (IT) design and development services. It sits in group 9983, other professional, technical and business services, under chapter 99, the chapter that holds every service code in the GST classification. Building software to a client's specification, whether an app, a website or an internal tool, usually falls here. Support, hosting and packaged licences have their own codes.

What GST rate applies to software development?

Software development is usually charged at 18% GST under forward charge. Rates change, so confirm the rate for your goods or services with your CA or the GST portal before you rely on it.

  • IT consulting and support go under 998313, hosting under 998315
  • A licence to use packaged software is classified differently from custom development; check before you bill it
  • Development for a client outside India can be a zero-rated export under an LUT when the conditions are met, as notified

A software development invoice line in SimpleERP

Codenest Technologies, Coimbatore, bills a Bengaluru client ₹1,50,000 for the second milestone of an order-tracking app. The line carries SAC 998314 at 18%, and because the client is in Karnataka the invoice shows IGST ₹27,000 instead of CGST and SGST.

  • SAC 998314 sits on the line from the saved service, so nobody types it per invoice
  • Place of supply picks CGST and SGST for a client in your state, or IGST for one in another
  • The HSN/SAC summary groups every line by code, ready for the GSTR-1 HSN table

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?

Software development is under forward charge, as notified: you charge GST and your client claims it as credit. There is no [reverse charge](/glossary/reverse-charge-mechanism) entry for it when you supply a client in India.

  • Exports of services need the payment in convertible foreign exchange and the other notified conditions; check
  • Subscriptions you buy from overseas software vendors may put reverse charge on you as the buyer, as notified
  • Below the registration threshold you need not register, though most B2B clients ask for a GSTIN

Sources

FAQ

Questions, answered

Is SAC mandatory on my software development invoice?

Yes, on B2B invoices: four digits (9983) up to ₹5 crore turnover and six digits above it. Printing 998314 is clearer, because heading 9983 also covers consulting, design and advertising.

Can I use 9983 instead of 998314?

Up to ₹5 crore aggregate turnover, 9983 meets the rule on B2B invoices. Above it, use 998314. If you bill development and support on one invoice, give each line its own code so the HSN summary separates them.

Does reverse charge apply to software development?

No. Custom software development for clients in India is under forward charge, so you charge 18% GST on your invoice, as notified. Reverse charge can apply when you import software services from abroad, which is the buyer's side.

What if my client is in another state?

For a registered client, the place of supply is the client's location. A client in another state means IGST, a client in your state means CGST and SGST. SimpleERP reads the state from the client's GSTIN and picks the split.

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