Pipeline Construction Under SAC Code 995423

Pipeline construction services cover the main civil work for long distance pipelines, power lines and support structures used to move water, gas, oil or electricity. Contractors handle route planning, trenching, supports, erection and testing so that the network works safely. Under GST, this work is classified under SAC 995423. The SAC code and its GST rate decide how much GST is charged and how the value is reported in GST returns.

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995423 SAC Code GST Rate

Review old and new GST rates for Pipeline Construction under 995423 SAC Code.

Pipeline construction services for water, gas, oil and power transmission are treated as civil engineering or works contract services under GST. In the early years, different contract models and composite billing sometimes resulted in different effective tax outcomes for similar pipeline projects, which complicated project costing and cash flow planning for contractors and project owners.

After the September 2025 rationalisation, construction of long distance pipelines, power lines and related support structures covered under SAC 995423 generally falls in the 18 percent slab with input tax credit. This standard rate applies to most such infrastructure projects, unless a specific notification grants a concessional treatment for a particular government or strategic scheme.

The table below shows the latest standard GST rate for SAC code 995423.

SAC Code

995423

Description

General construction services of long-distance underground/overland/submarine pipelines, communication and electric power lines (cables); pumping stations and related works; transformer stations and related works.

New Rate

18 %
Standard

Old Rate

18 %

Notes

Long distance pipelines and power line construction are included in 99542; SAC wise tools show 18 percent as the working rate, even though some older notifications offered 12 percent for specific types of works contracts which the 56th Council has now rationalised to 18.

When raising invoices for services under SAC 995423, contractors should clearly show the taxable value and 18 percent GST so that eligible recipients can claim input tax credit correctly. The same SAC code and rate should be followed in GSTR 1 for outward supplies and in GSTR 3B when reporting the tax liability on pipeline construction services for each tax period.

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Practical Classification Guidance

In day to day practice, a contractor should use SAC 995423 when the primary objective of the contract is construction of long distance pipelines or power lines. If the work is more focused on buildings, roads or general site development, another SAC within 9954 may be more suitable. Correct SAC selection and GST rate application helps reduce future disputes and keeps the input tax credit trail easier to explain during audits or assessments.

Conclusion

Pipeline construction services under SAC 995423 cover construction of long distance pipelines, power lines and related support structures used for transporting water, gas, oil or electricity. These services are now generally taxed at 18 percent with input tax credit after the September 2025 changes. Contractors and project owners should ensure that their contracts are correctly classified under this SAC code, apply the right GST rate on every invoice and follow the same classification in GST returns . For specialised or subsidised infrastructure schemes, it is sensible to review the latest GST rules and consult a tax professional.

Frequently Asked Questions

Clear answers to common queries about SAC Code 995423 and GST compliance.

What is SAC code 995423 in GST?

 This code is used for construction of long distance pipelines and related civil works. It usually covers cross country oil, gas or large water transmission pipelines, pumping stations, valve chambers and similar infrastructure created under heavy civil engineering contracts.

Does SAC 995423 cover oil, gas and water pipeline projects?

Yes. Major transmission pipelines for crude oil, natural gas, refined products or large water supply systems are normally classified under 995423. Smaller local distribution lines inside colonies or factories might fall under other codes, but trunk lines and pumping stations usually fit here.

What GST rate applies to services under SAC 995423?

Services under this code generally attract 18% GST. There are usually no broad concessional rates just for pipelines. Any different treatment would come from a specific government notification for special pipeline projects, which must be checked on a case to case basis.

Are electrical transformer and power line works included in SAC 995423?

No. Electrical substations, transformers and overhead power lines are generally classified under other power related construction codes. SAC 995423 focuses on pipelines that carry fluids like oil, gas and water, not electrical energy. So power line projects should not be mapped to this code.

Can contractors claim ITC on projects billed under SAC 995423?

Yes. Contractors providing taxable works under 995423 can normally claim ITC on steel, coating materials, welding consumables, equipment hire and other eligible inputs. If output is exempt from GST, ITC is blocked and corresponding input taxes will form part of the overall project cost.

Important Disclaimer

The above does not constitute professional advice or a formal recommendation. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.