Site Preparation Services Under SAC Code 995432
Site preparation services cover land clearance, levelling and basic ground work before any building or infrastructure project starts. Contractors handle clearing bushes, removing old structures, basic cutting and filling so that the land is ready for construction. Under GST, this work is classified under SAC 995432. The SAC code and its GST rate decide how much GST is charged and how the value is shown in GST returns .
Site Preparation Services GST Rate for SAC Code 995432
Site preparation services such as land clearance, levelling and basic cutting and filling are treated as civil engineering or works contract services under GST. Earlier, different ways of combining site preparation with main construction sometimes led to different effective tax outcomes for similar jobs, which made costing and quotation work harder for contractors and clients.
After the September 2025 rationalisation, most site preparation and land clearance services under SAC 995432 generally fall in the 18 percent slab with input tax credit . This standard rate applies to most independent site preparation contracts unless a specific notification gives concessional treatment for a particular government or social sector scheme.
The table below shows the latest standard GST rate for SAC code 995432.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 995432 | Site formation and clearance services including preparation services to make sites ready for subsequent construction work, test drilling & boring & core extraction, digging of trenches. | 18% with ITC | 18% with ITC | Site formation, preparation and similar services are treated as construction related services and are mapped to 18 percent. Separate entries for more than 75 percent earthwork for government contracts have been pushed from 12 to 18 percent, so 18 remains the single operative slab post rationalisation. |
When issuing invoices for services under SAC 995432, contractors should clearly show the taxable value and 18 percent GST so that eligible clients can claim input tax credit wherever allowed. The same SAC code and rate should be used in GSTR 1 for outward supplies and in GSTR 3B while reporting the tax liability on site preparation and land clearance services.
Explore Other SAC Codes Under 9954
This SAC code is part of the broader construction services group 9954, which covers construction of buildings, industrial plants, roads, bridges, dams, pipelines and other civil engineering works, along with site preparation and building completion services. Each six digit SAC within this group helps match contracts to the main type of structure or facility being created, repaired or installed.
These are the main related six-digit SAC codes under 9954
In day to day use, businesses should pick the SAC code that best reflects the main nature of the contract. If the work is more focused on building construction, general infrastructure or routine maintenance, another SAC within 9954 may be more appropriate. Correct SAC selection and GST rate application help reduce future disputes, support a clean input tax credit trail and make GST records easier to justify during audits or departmental checks.
Conclusion
Site preparation services under SAC 995432 cover land clearance, levelling and related ground work carried out before construction. These jobs are now generally taxed at 18 percent with input tax credit after the September 2025 changes. Contractors and project owners should check that such contracts are correctly classified under this SAC code, apply the correct GST rate on all invoices and follow the same treatment in GST returns. For special government supported projects, it is wise to review the latest GST rules and take guidance from a tax professional.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.
Frequently Asked Questions
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Which activities fall under SAC code 995432?
This code covers wider site preparation and land development before main construction. It includes heavy grading, deep trenching, filling, making construction platforms, temporary internal roads and other coordinated works that ready a full site for building or infrastructure projects.
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Does SAC 995432 include land clearing, grading and trenching?
Yes. Land clearing, removal of topsoil, extensive grading, deep trenches for foundations or utilities and related activities generally fall under 995432 when done on a significant scale across the project site. Very light or small jobs might instead use basic site preparation codes.
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What is the GST rate on services under SAC 995432?
Services under this code usually attract 18% GST. This is treated as construction related work. Any exemption would depend on the larger project type and specific notifications. In most normal private projects, contractors should assume the standard 18% rate with input tax credit allowed.
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Should developers use SAC 995432 for pre construction site works?
Yes. When developers award separate contracts for full site preparation before building works, 995432 is normally appropriate. If the same contractor is doing both site preparation and building under one contract, the entire work is often classified under the main building construction SAC instead.
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Is ITC available on GST paid for services under SAC 995432?
Businesses can usually claim ITC on GST paid for site preparation when the property will support taxable business activities. If the land is for exempt uses or for a personal residence, ITC is not available. Contractors themselves can claim ITC on their own inputs for taxable supplies.