Software Development Services SAC Codes & GST Rate
Custom software development, mobile app development, web development, SaaS platforms, ERP systems, API development, and related IT services.
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| Item Description | Qty | Rate | Tax % | Amount | |
|---|---|---|---|---|---|
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Software Development Services — SAC Code List
| SAC Code | Service Description | GST Rate |
|---|---|---|
| 998311 | Custom software development & programming services | 18% |
| 998312 | Software licensing & supply of packaged software | 18% |
| 998313 | Software maintenance, modification & upgrades | 18% |
| 998314 | IT consulting & software advisory services | 18% |
| 998315 | Web development, e-commerce & online platform development | 18% |
| 998316 | Mobile app development for iOS & Android | 18% |
Source: CBIC GST Rate Notification. Always verify the current rate at cbic-gst.gov.in before filing returns.
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Sample GST Invoice — Software Development Services
A Bengaluru software firm invoices a Mumbai e-commerce company ₹8,00,000 for custom order management software (SAC 998311). Inter-state: IGST at 18% = ₹1,44,000. Total: ₹9,44,000. If the client is outside India and payment is in USD, IGST = 0% (export of service).
How to enter on your GST invoice:
- Select "Service" type in the invoice generator
- Enter SAC code: 998311
- Enter the service description matching your work
- Select GST rate: 18%
- Enter buyer's state — CGST+SGST applies for intra-state, IGST for inter-state
GST Applicability — Software Development Services
| Scenario | Tax Type | Rate |
|---|---|---|
| Intra-state supply (seller & buyer same state) | CGST + SGST | 18% split equally |
| Inter-state supply (different states) | IGST | 18% (full) |
| Export (service recipient outside India) | Zero-rated (IGST 0% or LUT) | 0% (refundable) |
Frequently Asked Questions
What SAC code applies to mobile app development?
Mobile app development for iOS and Android uses SAC 998316. General software development uses SAC 998311. All software development services attract 18% GST regardless of the platform or technology used.
Is there GST on software exported to foreign clients?
Software services exported to foreign clients are zero-rated under GST — 0% applies. The software company must file an LUT (Letter of Undertaking) and receive payment in foreign exchange. This is distinct from sale of packaged software, which may have different treatment.
What is the difference between SAC 998311 and 998312?
SAC 998311 covers custom software development services — building software from scratch for a specific client. SAC 998312 covers supply of off-the-shelf/packaged software licences — like selling a WordPress plugin or SaaS subscription. Both attract 18% GST.
Can software companies claim ITC on cloud server costs?
Yes. Software companies can claim ITC on AWS, Google Cloud, Azure, and other cloud infrastructure costs since these are used for taxable service delivery. ITC is also available on software licences, developer tools, and office equipment used in the business.
GST Invoice Guide for Software Developers
See SAC codes, invoice format, common mistakes, and a ready-to-use GST invoice generator tailored for Software Developers.
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