A web developer finishes an e-commerce website for a client and prepares the GST invoice. The service description is clear—but which SAC code for web development should appear on the invoice?
This is where classification matters.
For actual website, application, or software design and development, the relevant classification generally falls under SAC 998314: Information technology (IT) design and development services. By contrast, SAC 998313 covers IT consulting and support services.
That distinction is important because the correct SAC code should reflect the service actually supplied, not simply a broad label such as “IT services”.
This guide explains the SAC code for web development and software development, the difference between 998313 and 998314, the applicable GST rate, and how to use the code on invoices.
This is where classification matters.
For actual website, application, or software design and development, the relevant classification generally falls under SAC 998314: Information technology (IT) design and development services. By contrast, SAC 998313 covers IT consulting and support services.
That distinction is important because the correct SAC code should reflect the service actually supplied, not simply a broad label such as “IT services”.
This guide explains the SAC code for web development and software development, the difference between 998313 and 998314, the applicable GST rate, and how to use the code on invoices.
TL;DR
- SAC 998314 covers information technology design and development services and is generally relevant to website, app, and custom software development.
- SAC 998313 covers IT consulting and support services rather than the actual development of software or websites.
- Services under the relevant Heading 9983 category generally attract 18% GST, subject to the nature and place of supply.
- Exported IT services can qualify as zero-rated supplies where the conditions for export of services are satisfied.
What is the SAC code for web development?
For services involving the actual design and development of websites or web applications, the relevant classification generally falls under:
SAC 998314 — Information technology (IT) design and development services
This can cover website, web-application, mobile-app, and custom-software design and development.
The correct classification should always depend on the actual scope of work described in the agreement and invoice.
What is SAC code 998313?
SAC 998313 covers Information technology (IT) consulting and support services.
It is more appropriate where the engagement primarily involves IT advisory, technology consulting, architecture guidance, technical support, or IT strategy.
This is different from actually building the website, application, or software.
The easiest distinction is:
998313 = consulting and support
998314 = design and development
SAC 998313 vs 998314
| SAC code | Service classification | Typical use |
|---|---|---|
| 998313 | IT consulting and support services | Technology consulting, advisory, support |
| 998314 | IT design and development services | Website, app, and custom software development |
A digital agency may even use both codes if it provides separately identifiable development and consulting services.
The invoice line item should reflect what was actually supplied.
What is the GST rate on web development services?
Web and software development services falling under the relevant Heading 9983 category generally attract 18% GST when supplied as taxable services in India.
Whether the tax is charged as CGST and SGST or IGST depends on the applicable place-of-supply and inter-State/intra-State rules.
How should the SAC code appear on a GST invoice?
Where SAC reporting is applicable, the invoice should clearly describe the service and use the appropriate classification.
For example:
| Description | SAC code | Taxable value |
|---|---|---|
| Website design and development | 998314 | ₹1,00,000 |
| IT consulting services | 998313 | ₹50,000 |
Avoid vague descriptions such as “digital services” where the underlying service can be identified more precisely.
Is SAC mandatory on every invoice?
SAC reporting requirements depend on the taxpayer, turnover, transaction type, and applicable GST invoicing rules.
Businesses should therefore avoid assuming that exactly the same level of SAC detail applies to every taxpayer and invoice.
Where a SAC code is required, use the classification that most accurately describes the service.
For businesses subject to e-invoicing, the code also needs to align with the valid classifications accepted by the e-invoice system.
What if you provide both web development and IT consulting?
If development and consulting are separately contracted and invoiced, the business may classify the development component under 998314 and the consulting component under 998313, where appropriate.
Do not automatically use one SAC code for every technology-related service simply because they are billed by the same company.
What SAC code applies to software development?
Custom software design and development generally falls under:
SAC 998314 — Information technology design and development services
This can include custom business software, mobile applications, web applications, software platforms, and bespoke technology solutions.
However, not every software-related transaction is automatically a software-development service.
Hosting, infrastructure management, IT consulting, support, licensing, or the supply of certain pre-developed software can have different classifications or GST treatment.
The commercial substance of the transaction matters.
What about web developers working for foreign clients?
A web or software developer in India may supply services to a customer located outside India.
Where all conditions for an export of services under GST are satisfied, the supply can qualify as a zero-rated supply.
Eligible exporters may generally export services under a Letter of Undertaking (LUT) without payment of IGST, subject to applicable conditions.
This does not mean overseas client work is automatically GST-free.
The supplier, recipient, place of supply, payment, and other statutory conditions must satisfy the export-of-services requirements.
Why does the correct SAC code matter?
Using the correct SAC code helps businesses apply the right GST treatment, create clearer invoices, and maintain consistent accounting and tax records.
The most important principle is to classify the actual service performed, rather than choosing a code based only on a generic industry label.
Common SAC mistakes for web and software businesses
Avoid:
- using 998313 for development work simply because it is an IT service
- treating consulting and software development as identical services
- using one code across every digital-service line item
- applying a GST rate without first confirming the service classification
- assuming a foreign client automatically makes the service zero-rated
- copying SAC codes from another company's invoice without checking the scope of work
For developers and digital agencies serving international clients, invoicing is only one part of getting paid.
PayGlocal helps Indian businesses and professionals collect international payments while maintaining clearer transaction and settlement records, making overseas receivables easier to track against invoices.
