Classification of Services :
Scheme of classification of services has been notified by Government as annexure to notification no 11/2017-CT (Rate) dated 28-06-2017.
Since customs tariff has 1 to 98 chapters, chapter no.99 has been given for services.
The service classification is 6 digit code.
The services have been classified in five broad sections as follows:
Section 5 – Construction service
Section 6 – Distributive Trade Services, Accommodation, Food Service
Section 7 – Financial and related services
Section 8 – business and production services
Section 9 – community, social and personal services
This section number forms third digit e.g. construction services commence with ‘995’ The sections are divided into headings which is a four digit code. These are divided in groups which becomes a fifth digit code. Its further division is made in ‘Tariff Item’ which is a six digit code.
Often there is overlapping and some activities can fall in more than one tariff items.
Service code is not SAC – the term often used in returns under GSTN is ‘SAC’ i.e. Service Accounting Code. This term was used in service tax law. This is really hang over of the past, as there is no concept of ‘accounting code’ in GST. It seems in the application for registration under GST, they are still using old service tax accounting codes, though the classification of services under GST is entirely different.