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When businesses provide transportation services in India, they must classify those services correctly under GST. This is where the transportation SAC code is most important. SAC stands for Services Accounting Code and is used to identify services for tax purposes.
For freight service providers, logistics companies, and transporters, knowing the freight SAC code or transport SAC code is necessary for correct billing and GST compliance. Using the correct code helps ensure tax calculations are accurate and that filing proceeds smoothly.
What Is a Transportation SAC Code?
The transportation SAC code is part of the GST system used to classify transport-related services. While goods are classified under HSN codes, services fall under SAC codes.
Under GST, transportation services are mainly grouped under SAC code 9965. This category includes services related to the transport of goods by road, rail, air, or water. Subcategories vary by the type of transport and service provided. Using the correct SAC code ensures that the applicable GST rate is applied correctly and that invoices are legally compliant.
Why the Correct Transport SAC Code Matters
Many small transport businesses underestimate the importance of correct classification. However, selecting the wrong transport SAC code can lead to incorrect tax rates being applied. This may result in-
- Underpayment or overpayment of GST
- Notices from tax authorities
- Errors during GST return filing
- Mismatch in input tax credit claims
Correct classification builds credibility and reduces compliance risks. It also streamlines accounting and auditing.
Common Transportation SAC Codes Under GST
| SAC Code | Service Description | Remarks |
| 9965 | Transportation of goods | Covers road, rail, air, and water transport |
| 996511 | Road transport of goods | Includes Goods Transport Agency (GTA) services |
| 996512 | Rail transport of goods | Applicable for goods moved by rail |
| 996513 | Air transport of goods | Used for air cargo services |
| 996519 | Other transport of goods | Includes inland waterways and other modes |
What are the Common Freight SAC Code Categories
The freight SAC code generally falls under the broader transportation category. Some of the common service types included under SAC 9965 are as follows.
- Transport of goods by road
- Transport of goods by rail
- Transport of goods by air
- Transport of goods by inland waterways
For example, goods transport agency (GTA) services fall under specific subcategories within SAC 9965. The GST rate may differ depending on whether input tax credit is claimed. Businesses can charge the correct GST rate when they understand these differences.
Also read This: What is HTS Code and Why It Matters in Imports
GST Rates Applicable to Transportation Services
Transportation services classified under SAC 9965 are subject to specific GST rates depending on the type of service provided and the conditions applied. For example, goods transport agency services may attract 5% GST when input tax credit is not claimed, or 12% GST when input tax credit is available.
Passenger transportation services may also be subject to different GST rates depending on the mode of transport, such as road, rail, or air. It is always advisable to review the latest GST notifications before issuing invoices to ensure that the correct rate is applied.
Transportation SAC Code vs HSN Code
Many people confuse SAC codes with HSN codes. The difference is simple, as described below.
- HSN codes are used for goods.
- SAC codes are used for services.
Since transportation is a service, the correct classification always falls under the transportation SAC code rather than an HSN code. This distinction is important for GST compliance and reporting.
Who Should Use the Freight SAC Code?
Freight SAC code is relevant for-.
- Goods transport agencies
- Logistics companies
- Courier services
- Truck operators providing taxable services
- Freight forwarders
Even small transport operators registered under GST must use the appropriate SAC code in their documentation. Correct usage supports proper GST return filing and avoids complications during assessments.
Importance of Proper Documentation
Accurate classification should be supported by proper documentation. Service agreements, transport receipts, and tax invoices must align with the selected SAC code. Proper documentation protects businesses during audits or compliance checks. Businesses should maintain clear records of the items listed below.
- Type of goods transported
- Mode of transportation
- Contract terms
- GST rate applied
Staying Updated With GST Changes
The GST rates and rules could change at any time. Companies that offer transportation services should stay up to date on any changes to the transportation SAC code or the freight SAC code.
Consulting a tax expert or regularly reading official GST reports are two ways to make sure you stay in compliance. Unexpected tax problems can be avoided by being careful.
Wrapping It Up
Transit and shipping companies must comply with the transportation SAC code to be GST-compliant. If you are a freight provider, courier service, or goods transport company, using the correct freight or transport SAC code is important for accurate tax calculations and easier billing.
To minimize risk and maximize efficiency, it matters to understand SAC classification, GST rates, and documentation requirements. The right classification is not just a formality; it is an important part of having a legal transportation business.
FAQs
Transportation services are mainly classified under SAC code 9965.
Both generally fall under SAC 9965, but specific subcategories apply depending on the service type.
It ensures accurate GST calculation, proper return filing, and avoids tax compliance issues.
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