Rail Shunting Under SAC Code 996731

Rail shunting services cover arranging, pushing and pulling rail wagons within yards, sidings and terminals so that trains can be formed, broken and placed for loading or unloading. Operators use locomotives and yard equipment to manage smooth wagon movement. Under GST, these rail shunting and marshalling services are classified under SAC 996731. This SAC code and its GST rate decide how GST is charged on shunting fees.  This helps rail yards work smoothly so that wagons are always positioned correctly for use.

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996731 SAC Code GST Rate

Review old and new GST rates for Rail Shunting under 996731 SAC Code.

Rail shunting services under SAC 996731 are treated as supporting services for rail transport under GST. They cover pushing, pulling and arranging wagons within yards, which are business to business services for rail operators and customers.

After the September 2025 rationalisation, most supporting transport services and warehousing services under these codes generally fall in the 18 percent slab with input tax credit, as they are business focused and input intensive. Certain cold storage services for specified agricultural produce or essential goods may have concessional or exempt treatment as per the latest notifications.

The table below explains the current GST rate applicable to SAC code 996731 for typical supporting transport and warehousing services.

SAC Code

996731

Description

Railway pushing or towing services

New Rate

18 %
Standard

Old Rate

18 %

Notes

Classified under supporting services for railway transport in 99673. These fall under the generic supporting transport services entry, which is standard rated at 18% with ITC in Notification 11/2017 and not altered by the 56th Council rationalisation.

When issuing invoices under this SAC code, service providers should clearly show the service value, the GST rate and tax amount so that clients can book the expense and claim input tax credit correctly. The same SAC code and rate should be used consistently in GSTR 1 and GSTR 3B to keep GST records clear and easy to justify during assessment.

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Explore More SAC Codes Under 9967

Practical Classification Guidance

Logistics and warehousing businesses should select the SAC code that most closely matches the main service they provide. Using the correct SAC and applying the 18 percent GST slab with input tax credit, or any concessional treatment where notified, helps avoid disputes and keeps the input tax credit trail clean for both service providers and customers.

Conclusion

Rail shunting services under SAC 996731 cover moving wagons within rail yards and sidings. These supporting services are usually taxed at 18 percent with input tax credit for rail operators and industrial users. Service providers should capture the correct SAC code on bills, apply the proper GST rate and keep the same classification in GST returns. For integrated rail logistics contracts, it is sensible to study the latest GST guidance and take professional advice.

Frequently Asked Questions

Clear answers to common queries about SAC Code 996731 and GST compliance.

What is SAC code 996731 in GST for rail shunting?

SAC 996731 covers shunting, pushing, towing and marshalling of railway rolling stock in yards, sidings and terminals. It includes rearranging wagons, moving rakes within yards and positioning trains for loading, unloading or departure as a separate support service to main rail transport.

Does SAC 996731 cover railway pushing, towing and shunting operations?

Yes. Services where locomotives or shunting engines move wagons within a yard, assemble trains or shift rakes between sidings fall under SAC 996731. These are support activities that help rail operators and freight customers manage cargo movement but are not line-haul transport themselves.

What GST rate applies to rail shunting services under SAC 996731?

Rail shunting and yard operations are generally taxable at 18% as support services to transport. GST is levied on the service fees charged by yard operators, private siding owners or rail companies for performing these shunting and marshalling activities for customers.

Should siding and yard operators use SAC 996731 on their invoices?

Yes. Owners or operators of private sidings, industrial yards or terminals that charge for shunting or receiving rail rakes should quote SAC 996731 on invoices. This clarifies that the service is a rail support operation and helps recipients correctly classify input services in their GST records.

Can rail operators claim ITC on SAC 996731 services?

Rail operators and industrial users who pay GST on shunting services and use them for taxable freight or business activities can usually claim ITC. They must hold proper tax invoices, ensure GST is paid and record the services as part of their eligible input credits.

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.