IT Partners raises concern on Disparity in SAC Codes, Post-GST

Suksham Sharma
12 Jul 2017
IT Partners raises concern on Disparity in SAC Codes, Post-GST IT Partners raises concern on Disparity in SAC Codes, Post-GST

A lot of channel partners post-GST have been raising queries that they are not clear on the HSN codes to be used for GST billing and then there is the adding salt situation by the distributors who have shared different codes for their businesses.

Reacting on the situation, Harinder Salwan of Tricom Multimedia shared the mails received from various vendors. Some of the shared data by Harinder is given below:

By INGRAM Team 1


Generic Description SAC GST Rate SGST CGST IGST Current VAT code
Perpetual License/Subscription 998434 18% 9% 9% 18% SF


By INGRAM Team 2

“SAC codes for Perpetual: 998434 and for Cloud : 998315”


By Tally

The Service Accounting Code (SAC) of all our SKU’s will be 997331. The Service Description is “Licensing Services for the Right to Use Computer Software and Databases”.

 The channel partners with these queries and not so unified codes are requesting for some standardization in the industry for the benefit of the whole IT Community.

Further in the talking, Harinder shared, "There are three major grouping under which software should fall based on the type of software which is currently available in two modes: Perpetual and Cloud/Subscription. The department has three categories defined for services pertaining to software which should fall in the service activity codes, but each distributor is sharing its own SAC based on the vendor. Our concern is that how can there be different codes based on the definition by each vendor/distributor".

"Looking at this multiple service codes, the partners will have a very tough time and will always get a mixed remembering that which code is for which product when the type of service will be similar. There has to be standardization in selection of Service Activity Code", added Harinder

Here is the shared sample of major vendors by Harinder:


Generic Description SAC
Perpetual License/Subscription 998434


Generic Description SAC
Perpetual License/Subscription 998434




Sr. No. Description of Services                                                            Service Accounting Code


2 SCIENTIFIC AND TECHNICAL CONSULTANCY =                            0044125

3 MAINTENANCE OR REPAIR SERVICE=                                                44245

4 BUSINESS AUXILIARY SERVICES =                                                      44225

5 LEGAL CONSULTANCY SERVICES=                                                    0044480

Commenting on the disparity in the codes, Kailash Gupta of ETSC Computers, a channel partner in Jaipur said, "This is the major concern of the whole IT community right now as there is a lot of confusion among the partners over the different codes provided by the vendors on the same items. Hopefully things will get sorted in the coming time”.

“The government has done this only because they wanted one nation, one tax but I think this should be like for same industry there should be one slab in order to avoid the confusion that we are right now facing after the implementation and this should be one industry one tax" added Kailash.

Nityanand Shetty, Managing Director of Essen Vision shared, “We are still not clear on the codes part. We are very well aware of the fact that the changes in the process will help us in the long run but now there is the issue of confusion in the community, so there is little lack of preparation here which I am sure will be taken care of with time”.

On the other hand Saket Kapoor, General Secretary of  FAIITA, Delhi believes that this whole concept of GST and new taxation is something very new to the partners, and even for everybody else who are involved here so there are chances of mistakes and confusion. I think we should be positive about the same as the process will take some time in getting back to the track”.

Kshitij M. Kotak, CEO of Fortune Grecells Pvt Ltd, Mumbai added, “Disparity in codes is a major concern post GST as each vendor is coming up with his own codes, even the billing of the products by the distributors is based on different codes for same items, so here the SIs billing the end customer are not clear on the codes part and that’s creating confusion in the community which should be cleared of soon”.


With multiple vendors throughout the country, there is a genuine confusion in the channel community. Hopefully the distributors will reach at uniformity with the codes, as the partners request so that the channel in future can avoid the landing into such compliance issues later.

Note: SAC stands for Service Accounting Codes which are adopted by the Central Board of Excise and Customs (CBEC) for identification of the services and HSN stands for Harmonized System of Nomenclature which is internationally accepted product coding system used to maintain uniformity in classification of goods.


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