Construction services fall under SAC heading 9954. It has seven groups: 99541 buildings, 99542 civil engineering works, 99543 site preparation, 99544 prefabricated erection, 99545 special trade work, 99546 installation and 99547 finishing. GST rates depend on the type of contract and recipient, so check the amended Notification 11/2017-Central Tax (Rate) for your entry.
Construction is one of the most complex areas of GST. A builder selling flats, a contractor building a factory, a sub-contractor laying tiles and an electrician wiring an office all supply "construction services", but their codes and rates can differ. This guide lists the official SAC codes under heading 9954, explains how rates are decided, and shows how to invoice correctly.
New to service codes? Start with what is SAC code.
Where do construction services sit in the SAC list?
Construction services are Section 5 of Chapter 99, under Heading 9954 — Construction services. The heading has seven groups:
| Group | Description |
|---|---|
| 99541 | Construction services of buildings |
| 99542 | General construction services of civil engineering works |
| 99543 | Site preparation services |
| 99544 | Assembly and erection of prefabricated constructions |
| 99545 | Special trade construction services |
| 99546 | Installation services |
| 99547 | Building completion and finishing services |
What are the SAC codes for building and civil works?
Group 99541 — Buildings
| SAC | Description |
|---|---|
| 995411 | Single dwelling, multi-dwelling or multi-storied residential buildings |
| 995412 | Other residential buildings (old age homes, homeless shelters, hostels) |
| 995413 | Industrial buildings (production, workshops, storage) |
| 995414 | Commercial buildings (offices, malls, hotels, restaurants, terminals, theatres) |
| 995415 | Other non-residential buildings (schools, hospitals, religious places, courts, museums) |
| 995416 | Other buildings nowhere else classified |
| 995419 | Repair, alteration, renovation, maintenance of the above buildings |
Group 99542 — Civil engineering works
| SAC | Description |
|---|---|
| 995421 | Highways, streets, roads, railways, runways, bridges, tunnels |
| 995422 | Harbours, waterways, dams, water mains, irrigation |
| 995423 | Long-distance pipelines, communication and power lines, pumping and transformer stations |
| 995424 | Local water and sewage pipelines, electricity and communication cables |
| 995425 | Mines and industrial plants |
| 995426 | Power plants and related infrastructure |
| 995427 | Outdoor sport and recreation facilities |
| 995428 | Other civil engineering works nowhere else classified |
| 995429 | Repair, renovation and maintenance of the above |
What are the SAC codes for specialist trades?
| SAC | Description | Group |
|---|---|---|
| 995431 | Demolition | Site preparation |
| 995432 | Site formation, clearance, test drilling, trench digging | Site preparation |
| 995433 | Excavating and earthmoving | Site preparation |
| 995434 | Water well drilling, septic system installation | Site preparation |
| 995441 | Erection of prefabricated buildings | Prefabricated |
| 995451 | Pile driving and foundations | Special trade |
| 995452 | Building and roof framing | Special trade |
| 995453 | Roofing and waterproofing | Special trade |
| 995454 | Concrete services | Special trade |
| 995455 | Structural steel erection | Special trade |
| 995456 | Masonry | Special trade |
| 995457 | Scaffolding | Special trade |
| 995461 | Electrical installation, fire and burglar alarm installation | Installation |
| 995462 | Water plumbing and drain laying | Installation |
| 995463 | Heating, ventilation and air-conditioning installation | Installation |
| 995464 | Gas fitting | Installation |
| 995465 | Insulation | Installation |
| 995466 | Lift and escalator installation | Installation |
| 995471 | Glazing | Finishing |
| 995472 | Plastering | Finishing |
| 995473 | Painting | Finishing |
| 995474 | Floor and wall tiling | Finishing |
| 995475 | Other floor laying, wall covering and wallpapering | Finishing |
| 995476 | Joinery and carpentry | Finishing |
| 995477 | Fencing and railing | Finishing |
| 995478 | Other completion and finishing services | Finishing |
Each group also has a "repair, alteration and maintenance" code ending in 9 (995439, 995449, 995459, 995469, 995479).
How are GST rates on construction decided?
Unlike goods, construction rates are not set by SAC alone. Serial number 3 of Notification 11/2017-Central Tax (Rate), as amended, lists several items based on:
- Who the recipient is (for example, Government entities, local authorities or private clients).
- What is being built (residential apartments in a real-estate project, affordable housing, infrastructure, commercial buildings).
- Whether input tax credit is taken (some concessional entries apply only if ITC is not availed).
- Whether it is a works contract (a contract for construction or repair of immovable property involving both goods and services, which GST treats as a supply of services).
What changed in September 2025: Following the 56th GST Council's recommendations, Notification 15/2025-Central Tax (Rate) substituted 9% central tax (18% in total) for items (vii), (viii) and (x) under serial number 3, with effect from 22 September 2025. The Council's release describes these as works-contract services that were at 12%, including composite works contracts involving predominantly earthwork (over 75% of the contract value) provided to Government and the corresponding sub-contracts, now at 18% with ITC.
General works contracts: Many works contracts for private clients fall under the residual works-contract item at 18%. CBIC's Circular 177/09/2022-TRU had earlier recorded that works contracts for Government and local authorities, which were at a concessional 12%, would attract 18% from 18 July 2022.
Residential real estate: The concessional rates for residential apartments in real-estate projects carry special conditions, including restrictions on input tax credit. These entries were not among the items changed by Notification 15/2025, but for the exact current rate and conditions, check the current rate notification rather than relying on a chart.
Worked example: a contractor's running bill
A Nashik contractor (AATO ₹9 crore last year, so 6-digit SAC is required) is building a warehouse for a private company in Nashik. The contract is a works contract at 18% (9% CGST + 9% SGST), confirmed by the contractor's tax adviser for this project.
| Line | SAC | Amount |
|---|---|---|
| Running Account Bill 4: construction of industrial building, work done this month | 995413 | ₹18,50,000 |
| Less: mobilisation advance adjusted | — | (₹1,50,000) |
| Taxable value this bill | ₹17,00,000 | |
| CGST 9% | ₹1,53,000 | |
| SGST 9% | ₹1,53,000 | |
| Bill total | ₹20,06,000 |
Two practical points:
- Advances: GST on services is generally payable when the advance is received, so the mobilisation advance should already have been taxed through a receipt voucher. Adjusting it in the running bill avoids double taxation. See advance payment under GST.
- Retention money: If the client retains, say, 5% until completion, GST is still generally due on the full bill value at the time of supply, not when the retention is released. Confirm treatment with your adviser.
A sub-contractor doing only the electrical work on the same site would invoice the main contractor under 995461 at the applicable rate.
How should construction businesses set up billing?
- Create service items per SAC you use (for example 995413, 995461, 995474).
- Record the rate entry and condition for each contract type, not just per SAC, because the same SAC can carry different rates for different clients.
- Use running bills with cumulative and current-period values, and link advances and retention.
- Apply place-of-supply rules: for services directly related to immovable property, the place of supply is generally where the property is located. See place of supply rules.
- Issue credit notes for variations and deductions with the same SAC.
Billing Software by Betterwork lets you store SAC on each service item, issue credit and debit notes for variations, and export HSN/SAC summaries for returns.
What documents should a contractor keep with each bill?
Construction bills are often checked against measurement and contract records. Keep these with every running bill:
- Measurement book or certified measurement sheet for the period
- Work order and any amendments or variation orders
- Receipt vouchers for advances, with the tax paid on them
- Details of retention, deductions and recoveries made by the client
- TDS under GST (where the recipient is a notified Government entity) and income-tax TDS certificates
How do I choose between two construction SAC codes?
Contracts often cover several trades. A turnkey office fit-out might include civil work, electrical installation, HVAC, flooring and painting. Use these tests:
- Is it one works contract for a single outcome? If the client is buying a finished building or fit-out under one contract, the work is usually coded by the overall construction (for example, 995414 for a commercial building), not split by trade.
- Are trades contracted and priced separately? Then each contract or line can carry its own code (995461 electrical, 995463 HVAC, 995474 tiling).
- Is it new work or repair? Repair, alteration and maintenance have their own codes ending in 9, such as 995419 for buildings.
- Is it a building or a civil engineering work? Roads, pipelines and plants go under group 99542, not 99541.
How should a contractor set up codes for each project?
Construction firms often run several projects at once, each with a different client type and contract structure. A small amount of setup per project avoids most rate errors.
- Create a project record with the client's name, GSTIN (if any), whether it is a Government or private client, and the site address, which matters for place of supply.
- Identify the contract type: works contract, pure labour, supply of goods only, or a real-estate sale. Each points to a different code and rate entry.
- Map the rate entry in the services rate notification, noting its serial number, item and any conditions on input tax credit.
- Set up the billing items: running-account bills, mobilisation advances, retention release and variation orders, all linked to the same code and rate.
- Review at each amendment. Several works-contract items changed in September 2025, so recheck ongoing contracts whenever the notification is amended.
Edge case: one contract, two clients
A Pune contractor builds a school block for a trust and, under a separate agreement, a boundary wall for a private developer on the adjoining plot. Even though both jobs use the same crew, they are separate supplies to separate recipients and must be billed under their own contracts. The rate for each depends on its own client type and contract terms, so the contractor maintains two project records rather than one combined invoice.
Common mistakes in construction invoicing
- Using HSN codes of materials on a works contract invoice. A works contract is a service; use a 9954 SAC.
- Assuming one rate for all 9954 work. The rate depends on recipient, project type and ITC conditions.
- Using pre-September-2025 rates for Government works. Several 12% works-contract items moved to 18% from 22 September 2025.
- Ignoring tax on advances. Mobilisation advances for services generally attract GST on receipt.
- Charging IGST for a local site. Place of supply for immovable property services is usually the property's location.
- Not showing 6 digits when required. Contractors above ₹5 crore AATO must show 6-digit SAC; see HSN code digits on invoice.
Key takeaways
- Construction services are under SAC heading 9954, in seven groups from 99541 to 99547.
- Six-digit codes distinguish residential, industrial, commercial, civil and specialist trade work.
- Rates depend on the rate-notification entry, the recipient and ITC conditions, not on SAC alone.
- Several Government works-contract items moved from 12% to 18% from 22 September 2025.
- Track advances, retention and variations carefully in running bills.
This guide is general information, not tax advice. Rules last checked on 20 October 2026; confirm with your tax professional for your situation.