Labour, repair, installation and AMC charges do not take an HSN code, they take a SAC. Here is how to pick the right service code, the right rate, and how to show both on one shop invoice.
Hardware shops, mobile repair counters, electronics dealers and furniture stores all hit the same billing problem eventually. You sold a ceiling fan and also charged 300 rupees to install it. You replaced a phone screen and billed the part and the work separately. The parts line takes an HSN code. The labour line does not.
Services on a GST invoice need a SAC, the Service Accounting Code. Typing a goods HSN onto a labour line is one of the most common classification mistakes on small-shop invoices, and it is the kind of thing that only surfaces when someone actually reads your bill or reconciles your GSTR-1. Here is how to get both right on the same document.
Both codes come out of the same GST classification framework, but they cover different things.
| HSN code | SAC | |
|---|---|---|
| Stands for | Harmonised System of Nomenclature | Service Accounting Code |
| Covers | Goods you stock and sell | Work you perform |
| Chapters used | 01 to 98 | Chapter 99 only |
| Length on an invoice | 4, 6 or 8 digits by turnover | 6 digits in practice |
| Examples | 8414 (fans), 8517 (mobile phones), 9403 (furniture) | 998713, 998724, 995461 |
The giveaway is easy to remember: if the code starts with 99, it is a service code. Anything else is a goods code.
So when a shop owner searches for the HSN code for labour charges, the accurate answer is that labour does not have one. It has a SAC, and for retail it almost always sits under heading 9987, 9954, 9988 or 9985.
It depends on what the labour actually is, not on what you sell:
Most retail counters only ever need the first two.
| What you billed | SAC | Usual rate |
|---|---|---|
| Repair of computers, laptops, peripherals | 998713 | 18% |
| Repair of mobile and telecom equipment | 998716 | 18% |
| Repair of machinery and fabricated metal products | 998711 | 18% |
| Repair of furniture | 998724 | 18% |
| Repair of other goods not listed elsewhere | 998729 | 18% |
| Electrical installation and wiring | 995461 | 18% |
| Plumbing and drain laying | 995462 | 18% |
| AC, heating and ventilation installation | 995463 | 18% |
| Installation of other goods | 998739 | 18% |
Most repair, installation and maintenance services sit at 18%, but job work under 9988 does not, and pure labour contracts tied to certain residential construction carry an exemption. Check the current notification for anything outside plain repair work before you lock a rate into your item master.
This is the part that trips people up. If you sell a geyser at 12,000 rupees "installation included" with no separate charge, that is a composite supply. The principal supply is the goods, so the whole amount goes under the geyser's HSN at the geyser's rate. No SAC appears anywhere.
The moment you show installation as its own line with its own price, it becomes its own supply and needs:
So a 12% product and an 18% installation charge on the same invoice is completely normal. Do not average them into one blended rate to make the bill look tidier.
An annual maintenance contract is a service, even when it quietly includes replacement of small parts. The principal supply is the maintenance, so the contract carries the repair SAC that matches the equipment and that SAC's rate, usually 18%.
Two things worth noting:
The fix is structural, not per-invoice. In your billing software, create your labour and service charges as proper saleable items, each with:
Do that and the code prints itself on every bill, and your HSN-wise summary in Table 12 of GSTR-1 comes out with the service rows already populated instead of blank. If you are stuck on the goods side of the same problem, our HSN code finder and the shop-wise HSN lists cover that.
No. HSN codes classify goods only. Labour, repair, installation and service charges are classified under Service Accounting Codes in Chapter 99, most often heading 9987 for repair and maintenance or 9954 for installation and construction work. If a code you were given for labour does not start with 99, it is the wrong type of code.
Standalone repair, maintenance and installation services are generally taxed at 18%. Job work under heading 9988 is rated differently depending on the sector, and certain pure labour construction contracts are exempt. When labour is bundled into a product sale with no separate charge, the goods rate applies to the whole amount instead.
Yes, and it should. A bill with a fan on one line and its installation on the next will carry the fan's HSN on the first line and the installation SAC on the second, each with its own taxable value and rate. There is no rule requiring a single code type per invoice.
Use the repair and maintenance SAC that matches the equipment covered, for example 998713 for computer AMCs or 998716 for telecom equipment. Including spare parts in the contract does not change this, because the maintenance service remains the principal supply of the composite contract.
Smaller taxpayers get a shorter digit requirement rather than an exemption from coding, and service headings are only meaningful at six digits, so using the full 6-digit SAC is the practical choice at any turnover. It also keeps your GSTR-1 HSN summary consistent instead of mixing lengths across lines.
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