GST

GST Rates and SAC Code on Construction Services

In anticipation of the launch of GST in India in July 2017, the GST Council announced the GST rate for all goods and services in May 2017.

The GST Council announced the GST rate for all products and services in May 2017 in advance of India’s introduction of the GST in July 2017. Know on SAC Code with GST on Construction Services.

There are five different GST rates in India: 0%, 0.25%, 3%, 5%, 12%, and 28%. On the other hand, the majority of the goods and assistance fall into one of the following five categories: 0%, 5%, 12%, 18%, or 28%. In this article, we examine India’s SAC code for construction services as well as its GST rate.

Construction Services SAC Code

The Service Tax Department in India uses a system of classification called the SAC code, or Service Accounting Code, to categorise services. Service providers will transition into GST more easily because GST rates for solutions are based on SAC codes. SAC Section 5 deals with various kinds of construction services.

Services for Building Construction

Building construction services are subject to the following SAC code and GST rate:

  • SAC Code 995411: Residential building construction services for single-family homes, multi-family homes, or buildings with multiple stories.
  • SAC Code 995412: construction services for other types of residential buildings, such as nursing homes, homeless shelters, and hostels, etc.
  • SAC Code 995413: Industrial building construction services are provided for structures used for production (such as assembly-line structures), workshops, storage facilities, and other structures of a similar nature.
  • SAC Code 995414: Construction services for commercial structures like office buildings, exhibition and wedding auditoriums, shopping areas, guesthouses, restaurants, airports, rail and highway terminals, parking garages, gas and service stations, theatres, and other structures of a similar nature.
  • SAC Code 995415: Other non-residential construction services include those for universities, hospitals, veterinary clinics, courthouses, prisons, museums, and other similar structures.
  • SAC Code 995416: services for other buildings’ construction.
  • SAC Code 995419: Services for the above-mentioned buildings that involve repairs, modifications, additions, replacements, renovations, upkeep, or remodelling.

A complex, buildings, civil structure, or a portion thereof, that is being sold to a buyer, in whole or in part, shall be constructed at an Applicable GST Rate of 18%. The price that the service recipient will pay includes the value of the land. Additionally, although input tax credit overages are permitted, refunds are not.

Civil Engineering Services and General Construction Projects:-

General construction services and civil engineering works are subject to the following SAC code and GST rate: 

  • SAC Code 995421: Services for general construction of bridges, tunnels, airfield runways, streets, roads, and railroads. 
  • SAC Code 995422: Services for general waterworks construction, including the building of dams, water mains, and harbours.
  • SAC Code 995423: General construction services for long-distance underground, above-ground, and underwater pipelines, communication, and electricity generation line segments (cables); trying to pump terminals and related tasks; transistor stations and related works.
  • SAC Code 995424: Electrical and communication cables, as well as general construction services for local water and sewage pipelines.
  • SAC Code 995425: general construction services for industrial facilities and mines.
  • SAC Code 995426: general building services for power plants and the infrastructure they need.
  • SAC Code 995427: general building services for facilities for outdoor recreation and sport.
  • SAC Code 995428: services for general construction and other civil engineering projects.
  • SAC Code 995429: Services for the above-mentioned structures that involve repairs, modifications, additions, replacements, renovation, upkeep, or remodelling.

General construction services and civil engineering projects are subject to an 18% GST rate.

Services for Site Readiness

For site preparation services, the SAC code and GST rate are as follows:

  • SAC 995431: deconstruction services.
  • SAC 995432: Services for site formation and clearance include trench digging, test drilling, boring, and core extraction in order to prepare the site for subsequent construction work.
  • SAC 995433: services for earthmoving and excavation.
  • SAC 995434: services for installing septic systems and drilling water wells.
  • SAC 995435: Various other site preparation assistance
  • SAC 995439: Services involving repairs, modifications, additions, replacements, and upkeep of the aforementioned structures.

For site preparation services, an 18% GST rate is applicable.

Prefabricated Building Assembly and Erection

For prefabricated constructions that are assembled and put into place, the following SAC code and GST rate apply:

  • SAC Code 995441: Services for prefabricated building installation, assembly, and installation.
  • SAC Code 995442: services for setting up, assembling, and erecting other prefabricated buildings and structures.
  • SAC Code 995443: All types of street furniture installation services. 
  • SAC Code 995444: other services for assembly and installation.
  • SAC Code 995449: Services involving repairs, modifications, additions, replacements, and upkeep of the aforementioned structures.

The applicable GST rate for prefabricated construction assembly and erection is 18%.

Construction Services Specific to Trade

Following are the SAC code and GST rate that apply to special trade construction services:

  • SAC Code 995451: services for foundations and driving piles.
  • SAC Code 995452: offering services for roof and building framing.
  • SAC Code 995453: Services for roofing and water resistance.
  • SAC Code 995454: Construction services
  • SAC Code 995455: services for constructing with steel.
  • SAC Code 995456: services for masons.
  • SAC Code 995457: Providing scaffolds.
  • SAC Code 995458: various specialised trade services for construction.
  • SAC Code 995459: Services involving repairs, modifications, additions, replacements, and upkeep of the aforementioned structures.

For special trade construction works, there is an 18% GST rate that is applicable.

Services for Installation

  • SAC Code 995461: Electrical installation services, including electrical wiring and fitting, burglar alarm system installation, and fire alarm installation.
  • SAC Code 995462: Services for installing water plumbing and drains.
  • SAC Code 995463: Installing heating, ventilation, and air conditioning systems is covered
  • SAC Code 995464: Installation services for gas fittings. 
  • SAC Code 995465: services for Insulation.
  • SAC Code 995468: it refers to additional installation services.
  • SAC Code 995469: Repair, modifications, additions, replacements, and upkeep of the aforementioned installations are included

For installation services, the applicable GST rate is 18%.

Building Finishing and Completion Services

  • SAC Code 995471: Glazing services
  • SAC Code 995472: Services for plastering fall under
  • Service Code SAC 995473: Painting.
  • SAC Code 995474: Services for tiling floors and walls.
  • SAC Code 995475:  Additional floor laying, wallpapering, and wall covering services.
  • SAC Code 995476: Services related to joinery and carpentry.
  • SAC Code 995477:  Services for railing and fencing.
  • SAC Code 995478: Additional finishing services for buildings
  • SAC Code 995479:  Services for Restoration, Modifications, Expansions, Replacements, and Maintenance of the Above Completion/Finishing Works. 

Building finishing and completion services are subject to an 18% GST rate.

Conclusion 

This article’s main goal is to raise public awareness of the GST rates that the government has announced that service providers will be responsible for paying. For any further details regarding GST on Construction Services with SAC Codes. Get in touch with the legal experts of Vakilsearch for more information related to this.

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