Land Clearing Under SAC Code 995435

Water well drilling services cover drilling borewells and tube wells and installing basic casing so that groundwater can be accessed for homes, farms or industrial units. Contractors use drilling rigs, pipes and support equipment to complete the well safely. Under GST, this work is classified under SAC 995435. The SAC code and its GST rate decide how much GST is charged and how the value is written in GST returns.

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995435 SAC Code GST Rate

Review old and new GST rates for Land Clearing under 995435 SAC Code.

Water well drilling services, including borewell and tube well drilling, are treated as civil engineering or works contract services under GST. Earlier, different ways of billing drilling, casing and pump supply sometimes led to different effective tax outcomes for similar well projects, which complicated costing and tax planning for both contractors and clients.

After the September 2025 rationalisation, most water well drilling services under SAC 995435 generally fall in the 18 percent slab with input tax credit . This standard rate applies where drilling and basic casing are provided as a service, unless a specific notification gives concessional treatment for a particular rural or social sector scheme.

The table below shows the latest standard GST rate for SAC code 995435.

SAC Code

995435

Description

Other site preparation services n.e.c

New Rate

18 %
Standard

Old Rate

18 %

Notes

Residual site preparation services under 995435 follow the same pattern as 995432 and 995433, with 18 percent as the main construction rate and earlier special 12 percent earthwork variants converging upward to 18.

When raising invoices for services under SAC 995435, contractors should clearly show the taxable value and 18 percent GST so that eligible customers can claim input tax credit correctly. The same SAC code and rate should also be followed in GSTR 1 for outward supplies and in GSTR 3B while reporting the tax liability on water well drilling services.

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Explore More SAC Codes Under 9954

Practical Classification Guidance

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

Water well drilling services under SAC 995435 cover drilling borewells and tube wells and installing basic casing so that groundwater can be accessed safely. These services are now generally taxed at 18 percent with input tax credit after the September 2025 changes. Contractors and users should check that such contracts are correctly mapped to this SAC code , apply the correct GST rate on every invoice and follow the same classification in GST returns. For wells drilled under government or subsidy schemes, it is sensible to verify the latest GST notifications and seek proper advice.

Frequently Asked Questions

Clear answers to common queries about SAC Code 995435 and GST compliance.

Which services come under SAC code 995435?

This code is for light site preparation and small preliminary works. It covers bush and grass clearing, simple surface dressing, minor levelling, light compacting, creating small temporary accesses and other limited works that prepare land without deep cuts or extensive engineering.

Does SAC 995435 include bush clearing, grading and basic site prep?

Yes. Bush removal, surface cleaning, shallow grading and simple compaction over smaller areas can fall under 995435. When the work is more extensive, with deep trenches, heavy cut and fill or large platforms, developers should shift to broader site preparation or earthwork codes.

What GST rate is charged on services under SAC 995435?

Services under this code typically attract 18% GST. Even though the works are small in scale, they are still treated as construction related services. Exemption or concessional rates are rare and only apply when a specific government notification clearly covers that type of small site project.

When should a contractor use SAC 995435 instead of 995432?

Use 995435 when the scope is limited to simple clearing and light grading without heavy engineering. Use 995432 when the contract includes substantial grading, trenches, initial road formation or coordinated pre construction works across the full project site. The main difference is the scale and depth of works.

Is ITC available on GST paid for services under SAC 995435?

 Businesses can usually claim ITC on GST paid for these services if the land will be used for taxable business projects. If it is for exempt activities or for personal housing, ITC is not allowed. Contractors themselves can still claim ITC on their own taxable inputs.

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.