Web Development SAC Code — 998313, 18% GST (2026 Guide)
Web developers — whether freelancers or agencies — often struggle to identify the correct SAC code for their GST invoice. The confusion arises because web development overlaps with software development, IT consulting, and digital services. This guide clarifies exactly which SAC code applies, the correct GST rate, and how to structure a web development GST invoice.
By Arjun Sharma· GST & Tax Compliance Specialist···Reviewed for GST accuracy
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Quick Answer
The SAC code for web development is 998313 (web development, e-commerce platforms, and online services). GST rate is 18%. If you are developing websites or web applications for clients outside India, the service is zero-rated (0% IGST) when you hold a Letter of Undertaking (LUT).
Web Development SAC Code: 998313
Web development services in India fall under SAC code 998313 — "Web development, e-commerce platform development, and related online service development." This includes: custom website development (HTML, CSS, JavaScript), WordPress and CMS-based websites, e-commerce store development (Shopify, WooCommerce, Magento), web application development (React, Angular, Vue.js + backend), and progressive web apps (PWA). GST rate on all web development services is 18%.
Service
SAC Code
GST Rate
Custom website development
998313
18%
WordPress website
998313
18%
E-commerce store (Shopify, WooCommerce)
998313
18%
Web application development
998311
18%
UI/UX design only
998431
18%
SEO & digital marketing
998365
18%
Website hosting (SaaS)
998316
18%
Web Development vs Software Development — Which SAC?
There is often confusion between 998311 (custom software development) and 998313 (web development). The practical distinction: if you are building a website or web-based platform primarily accessed through a browser, use SAC 998313. If you are developing backend APIs, complex business logic, or database systems as standalone software products, use SAC 998311. Most web agencies and freelancers use 998313 as the primary SAC code. Using either is acceptable — the GST rate is 18% for both.
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A Pune web development agency invoices a Delhi e-commerce brand for building a Shopify store: Taxable Value: ₹1,50,000 | SAC Code: 998313 | This is inter-state supply (Pune → Delhi) | IGST at 18%: ₹27,000 | Total Invoice: ₹1,77,000. If the agency and client are in the same state (e.g., both in Pune/Maharashtra): CGST 9% = ₹13,500 + SGST 9% = ₹13,500 = ₹27,000 GST. Total: ₹1,77,000.
Web Development for Foreign Clients — 0% GST
Web development services exported to foreign clients qualify as export of services under GST — zero-rated supply. This means 0% GST applies. Requirements: (1) Client must be outside India, (2) Payment received in foreign currency (USD, EUR, GBP, etc.) or through an authorised forex channel, (3) You must hold a Letter of Undertaking (LUT) filed with GSTN before invoicing. The LUT is free to file and valid for one financial year. Without LUT, you must charge IGST 18% and then claim a refund — which delays cash flow.
Do Web Developers Need GST Registration?
GST registration is mandatory for web developers if: (1) Annual turnover from India clients exceeds ₹20 lakh (₹10 lakh for special category states), OR (2) You provide services to clients in another state (even one inter-state invoice makes registration mandatory), OR (3) You provide services to foreign clients and want to file LUT for zero-rated export. Voluntary registration makes sense even below ₹20 lakh if you want to claim ITC on business expenses like hosting, software tools, laptop, and co-working space.
FAQs
What SAC code should a web developer use?
Web developers should use SAC code 998313 for website and web platform development. This covers static websites, WordPress sites, e-commerce stores, and web-based applications. GST rate is 18%.
Is web development GST exempt if I work for a startup?
No — GST exemption does not depend on the client's type (startup, MSME, or large company). If your annual turnover exceeds ₹20 lakh and the service is within India, 18% GST applies regardless of the client's size or registration status.
Can a web developer claim ITC on hosting and domain costs?
Yes. If you are GST-registered, you can claim ITC on web hosting bills (18% GST, SAC 998316), domain registration (18% GST), software subscriptions (Adobe Creative Cloud, Figma, GitHub — all 18%), and laptop purchases (18% GST on computers).
What GST applies if a web designer charges separately for design and development?
If you bill separately — design (SAC 998431, 18%) and development (SAC 998313, 18%) — you must show both line items on the invoice with the respective SAC codes. Both attract the same 18% GST rate, so the combined tax is identical whether billed together or separately.
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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