Construction Services HSN Code: Classification for Civil and Building Services
Construction services cover a wide range of activities, from civil works and building structures to finishing and related installation jobs. In GST, these supplies are treated as services and are classified using Service Accounting Codes, commonly called SAC. Using the correct code is important for contracts, invoices and returns, especially when different GST rates apply to different types of projects.
Construction Services SAC Code and GST Rate
| Service type | SAC code | Typical GST rate | Notes |
|---|---|---|---|
| Civil construction service | 9954 | 18% (general) | Covers construction services of buildings and civil engineering works, unless notified at a concessional rate. |
| General construction service for buildings | 99541 / 99542 | 18% (general) | Single and multi dwelling buildings, commercial and industrial buildings. |
| Residential projects eligible for concessional scheme | 9954 | 5% or 1% (scheme specific) | Affordable housing and specified projects where special notifications apply, usually without ITC. |
The exact GST rate on construction services depends on the nature of the project, the scheme chosen and the conditions in the relevant notifications. Contractors should always read the latest GST circulars before finalising tax treatment for a project.
What is the HSN code for civil construction services?
In GST, civil construction services are classified under the SAC group 9954, which covers construction services of buildings and civil engineering works. Under this group, specific six digit codes are used for residential buildings, non residential buildings, roads, bridges and other civil structures. For example, 995411 is used for construction of residential buildings and 995412 to 995414 cover other building types.
When raising invoices, contractors normally show the six digit SAC code that best matches the main nature of the work. This helps both the supplier and the recipient to explain the service during audit or assessment and to apply the correct GST rate.
What is the HSN code for construction services?
For services, the GST law uses Service Accounting Codes instead of HSN codes. However, many people still use the word HSN in a general way. Construction services are grouped under SAC 9954, and more detailed codes under this heading specify whether the work relates to buildings, roads, pipelines or other infrastructure.
General construction and building construction services both fall in this 9954 group. You should select the code that reflects the main component of the contract, rather than every minor activity, to avoid confusion.
How are civil and general construction services classified under SAC?
Civil construction services for buildings, such as apartments, offices and factories, are covered under SAC 99541 and 99542. Construction of roads, bridges, dams and similar civil engineering works is covered by other codes within the same 9954 group. The exact code depends on the type of structure and the description in the contract.
In practice, the contractor looks at the main deliverable. If the contract is mainly for building a residential tower, a residential building SAC is chosen. If it is for constructing a highway or bridge, the relevant civil engineering SAC is used. Finishing and installation services related to a building may fall under separate SAC groups for finishing services.
What is the HSN code for building construction services?
Building construction services for residential buildings are generally classified under SAC 995411, while other building types such as industrial and commercial buildings use SAC 995412 to 995414. These codes sit under the broader 9954 construction services group.
When the project involves both supply of materials and construction services together, it is treated as a works contract service under GST. Such works contracts are still classified using the relevant construction SAC, and the GST rate is applied as per the applicable scheme for that type of building or project.
How does GST apply to construction services?
Construction services generally attract GST at 18% when treated as normal works contract services with full input tax credit. However, special schemes exist for residential projects, especially affordable housing, where a lower GST rate such as 5% or 1% is applied subject to conditions and denial of ITC.
The GST rate also depends on whether the supply is of under construction property, completed property, or pure labour contracts. Because of these variations, builders and contractors should carefully read the relevant notifications and ensure that their invoicing and accounting system reflects the correct rate and SAC.
I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.
Frequently Asked Questions
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What is the HSN code for civil construction services?
Civil construction services fall under the service accounting group 9954 for construction services. Within this, codes such as 995411 to 995414 are used for different types of building construction works.
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Are general construction and building construction services classified separately?
Yes, within SAC 9954 there are different six digit codes for residential buildings, non residential buildings and other civil engineering works. You should choose the code that best describes the main structure being constructed.
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How does GST apply to construction services?
In many cases, construction services are taxed at 18% as works contract services with input tax credit. For specified residential projects, concessional rates such as 5% or 1% may apply under special schemes where ITC is restricted. The exact rate must be checked against the latest GST notifications.
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Can the type of construction affect the HSN code?
Yes, the type of construction has a direct impact on the SAC code used. Roads, bridges, tunnels, pipelines and buildings all have different codes within the construction services group. Correct classification helps apply the proper GST rate and avoid disputes.