SAC code consists of ___________ digits.

Correct option is D

Correct Answer: (d) 6

Explanation:

SAC (Service Accounting Code) is a 6-digit numerical code used in the GST (Goods and Services Tax) system in India to classify services for taxation purposes. It is issued by the Central Board of Indirect Taxes and Customs (CBIC) and is similar to the HSN (Harmonized System of Nomenclature) code, which is used for goods classification.

The first two digits (99) are fixed for all service categories, while the remaining four digits specify the nature of the service. SAC codes help in identifying services and determining the applicable GST rate, ensuring proper tax compliance and structured invoicing.

Information Booster:

● SAC codes consist of 6 digits, unlike HSN codes for goods, which have 6 or 8 digits.
● The first two digits (99) represent services, while the next four digits specify the service category.
● SAC codes help in GST returns, tax filing, and compliance.
● Services are categorized under different sections for easy identification and classification.
● Examples of SAC codes:

• 996311 – Hotel accommodation services
• 997331 – Legal consultancy services
• 998314 – IT software development services

Additional Knowledge:

• (a) 10: Incorrect; SAC codes are always 6 digits, not 10.
• (b) 4: Incorrect; Earlier SAC codes used 4 digits, but under GST, they have been expanded to 6 digits.
• (c) 5: Incorrect; SAC codes are 6-digit classifications under GST.