GST Invoice for IT Services: SAC Codes, 18% Rate & Format Guide
The Indian IT and technology services sector — from software developers and SaaS startups to IT consultants and support teams — has specific GST invoicing requirements. Most tech services attract 18% GST, but the SAC code, place of supply determination, and export treatment depend on the exact nature of the service.
By Arjun Sharma· GST & Tax Compliance Specialist···Reviewed for GST accuracy
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SAC Codes for IT and Technology Services
IT Service Type
SAC Code
GST Rate
Custom software development
998314
18%
IT consulting / advisory
998313
18%
Software installation / implementation
998315
18%
Software maintenance / support
998316
18%
Data processing services
998319
18%
Website design and development
998314
18%
App development (mobile)
998314
18%
Cloud services / SaaS
998315 / 998319
18%
Cybersecurity services
998313
18%
IT training and education
999293
18%
Business process outsourcing (BPO)
998511
18%
Database management
998319
18%
Place of Supply for IT Services
For IT services to B2B clients (registered businesses), the place of supply is the location of the registered recipient. For B2C clients, it is the location of the supplier.
Example
Bengaluru software company (Karnataka) → Delhi startup (Delhi): Place of supply = Delhi. IGST applies (18%). Invoice: SAC 998314, IGST 18%.
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Software services exported to foreign clients qualify as export of services and are zero-rated. File LUT on the GST portal to export without paying IGST.
Invoice the client in foreign currency (USD, GBP, EUR, etc.)
Include LUT mention on invoice
Claim ITC refund on all inputs (laptops, software licenses, office expenses)
Receive payment in foreign currency via RBI-approved channels
GST on SaaS Products
SaaS (Software as a Service) sold to Indian customers attracts 18% GST under SAC 998315 or 998319. For subscription billing, you issue monthly/quarterly invoices. For upfront annual billing, the full amount (with GST) is invoiced at the start.
Important
Foreign SaaS companies selling to Indian B2C customers must register under GST in India if their supplies constitute OIDAR (Online Information and Database Access) services.
Software licenses and subscriptions (18% — fully claimable)
Cloud services and hosting (18% — fully claimable)
Office rent (18% — fully claimable for business use)
Mobile phones used for business (limited — only if exclusively for business)
Travel for client work (partially claimable)
FAQs
What SAC code should I use for software development?
SAC 998314 covers "software development and production services." This is the most commonly used code for custom software development, web development, and app development.
Is GST applicable on software licence fees?
Yes. Software licence fees for use in India attract 18% GST under SAC 997331 (software supply). For subscription-based software (SaaS), use SAC 998315 or 998319.
Do IT companies need to charge GST on free trials?
No. Free trials with no consideration exchanged are not a "supply" under GST and do not attract GST. Once payment begins, GST applies from the first paid invoice.
What is the GST rate on IT hardware supply?
IT hardware (computers: HSN 8471, monitors: 8528, peripherals: 8473) attracts 18% GST. If you supply hardware bundled with software/services, the GST depends on the principal supply determination.
Why Businesses Stop Using Excel for GST Invoices
Manual GST calculation mistakes
One wrong CGST/SGST split or a misapplied rate triggers notices and ITC denial for your buyer.
Slow invoice creation
Copying last month's Excel file, updating dates, recalculating — 20 minutes for what should take 30 seconds.
Formatting breaks on every device
Excel invoices look different on every printer and PDF converter. Clients complain about unreadable layouts.
No easy sharing or payment link
Sending PDFs over WhatsApp with no way for clients to pay directly slows down collections.
Incorrect tax type (IGST vs CGST+SGST)
Excel can't auto-detect intra vs inter-state supply. Wrong tax type = ITC rejected for your buyer.
Disclaimer: The information in this article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. GST rules and rates are subject to change. Consult a qualified CA or tax professional before making compliance decisions.
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