GST rates and SAC code for courier and transport services

Introduction

India’s tax system is governed by the Goods and Services Tax (GST), which has streamlined the tax structure by replacing multiple taxes with a single tax. However, businesses in India face the challenge of determining the correct SAC code and GST rate for their services, including courier services and goods transport. This article aims to provide an insight into the correct SAC code and GST rate for these services and highlight the importance of accurately determining them for businesses.

SAC (Service Accounting Code)

The term “SAC” stands for Servicing Accounting Code. The service tax department in India has developed the SAC Codes as a system of categorization for services. The GST Council has opted to use the SAC code system for the purpose to levy GST (Goods and Service Tax) in India.

SAC refers to the 6-digit code in GST under GST law. For example, the SAC for IT design and development services is 998314.

• For all services, the first two digits of the SAC are the same, which is 99.
• In this case, the major type of services will be represented by the middle two digits (68) are Courier Services.
• The last two digits will indicate the details of the specific services.

SAC Code and GST Rate for Courier Services

Courier services play a vital role in many companies’ business operations in India, involving the transportation of goods, documents, or other items from one place to another. Such services are classified under SAC code 9968, which falls under the heading “Supporting and Auxiliary Transport Services.” The applicable Goods & Service Tax rate for courier services is 18%, which is the same for both domestic and international courier services.

However, some courier companies may also offer additional services such as warehousing or packaging, which might have a different SAC code and GST rate. Therefore, it is crucial for businesses to accurately determine the code and GST rate for all services received from courier companies to comply with GST laws.

SAC Code and GST Rate for Goods Transport Services

Goods transport services are also crucial for many businesses in India, involving the transportation of goods from one place to another. Such services fall under SAC code 9965, which falls under the heading “Goods Transport Services.” The applicable GST rate for goods transport services varies depending on the mode of transport used and the distance covered.

For road transport, the GST rate is 5% for distances traveled less than 150 km, 12% for distances between 150 km and 1000 km, and 18% for distances more than 1000 km. For rail transport, the GST rate is 5%. For air transport, the GST rate is 12%. For water transport, the GST rate is 5%.

Accurate Determination of SAC Code and GST Rate for Goods Transport Services

• Goods transport services fall under SAC code 9965, and the applicable GST rate varies depending on the mode of transport used and the distance covered.
• Some transport companies may provide additional services with different SAC codes and GST rates, such as loading and unloading or warehousing services.
• It is crucial for businesses to determine the correct code and GST rate for all services received from transport companies to comply with GST laws.
• Accurate determination of code and GST rate will help businesses avoid penalties for incorrect tax reporting and maintain proper records for filing GST returns on time.

Conclusion

In conclusion, it is vital for businesses operating in India to determine the correct SAC code and GST rate for courier services and goods transport. By accurately determining the SAC code and GST rate for each service, businesses can comply with GST laws and avoid penalties for incorrect tax reporting. It is also important to maintain proper records and file GST returns on time to avoid any legal and financial consequences. By staying informed about the latest GST regulations and complying with them, businesses can ensure smooth operations and avoid any tax-related issues.