Electricity Distribution Under SAC Code 996912

Electricity distribution services cover supply of electricity from substations to homes, shops and factories through local networks. Providers manage distribution lines, transformers, meters and billing so that end users receive stable power. Under GST, these electricity distribution and power supply services are classified under SAC 996912. This SAC code and its GST treatment decide how GST applies on distribution charges and service fees.  This helps homes and businesses receive usable electricity for day to day work and production.

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996912 SAC Code GST Rate

Review old and new GST rates for Electricity Distribution under 996912 SAC Code.

Electricity, gas, water and similar utility distribution services under these codes are treated as utility supply and distribution services under GST. In many cases, supply or transmission by recognised utilities enjoys specific exemptions, while commercial or non utility distribution may be taxable.

After the September 2025 rationalisation, wherever these utility services are taxable, the service component is generally placed in the 18 % slab with input tax credit, because network operation and distribution are input intensive. Where services continue to enjoy a notified exemption or zero effective rate, that treatment remains available as per the latest GST notifications.

The table below gives the broad GST treatment for SAC code 996912, showing the standard 18 % slab where taxable and any exempt utility cases as per notification.

SAC Code

996912

Description

Electricity distribution services (by other than an electricity transmission or distribution utility.)

New Rate

18 %
Standard

Old Rate

18 %

Notes

Where electricity-related services are provided by entities other than the notified transmission / distribution utilities (for example, certain franchise or support services), the general services rate of 18% with ITC applies. No specific change for this sub-code is notified in the 56th meeting; the slab stays at 18%.

Utility providers and industrial park operators should carefully check whether their supply falls under an exempt utility category or a taxable commercial service. Invoices should clearly mention the SAC code, applicable GST rate in % and tax amount so that customers can account for input tax credit correctly where eligible and keep the same treatment in GSTR 1 and GSTR 3B.

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Practical Classification Guidance

Utility providers, industrial park operators and large consumers should identify whether their contracts relate to exempt utility supply by recognised utilities or taxable commercial distribution services. Using the correct SAC and GST rate in %, and disclosing exemptions properly, helps avoid classification disputes and keeps the input tax credit trail clean for all parties.

Conclusion

Electricity distribution services under SAC 996912 relate to supply of power from substations to end users. Where distribution is by notified utilities, exemptions may apply, while commercial or private distribution services tend to be taxable, often at 18 % with input tax credit. Distributors should understand whether their activity qualifies as exempt utility supply or taxable service, apply the correct GST rate and keep consistent reporting in GST returns.

Frequently Asked Questions

Clear answers to common queries about SAC Code 996912 and GST compliance.

What does SAC code 996912 cover in GST?

SAC 996912 covers electricity distribution and power supply services to end consumers by distribution companies or utilities. It includes providing electricity to homes, shops, factories and other users through distribution lines, and charging them for units consumed as per tariff plans.

Does SAC 996912 include electricity distribution and power supply to consumers?

Yes. Supply of electricity to households, commercial units and industries through the public distribution network is classified under SAC 996912. For most regular electricity supply, this activity is treated as exempt from GST, so no GST is charged on the energy bill to consumers.

What is the GST treatment of electricity distribution services under SAC 996912?

Electricity itself is outside GST and treated as exempt. So the main supply of electricity by a licensed distributor is not subject to GST. However, some separate charges like meter rent, late payment fees or other service charges may be taxable if not covered by exemptions.

Are charges like fixed charge and wheeling charge billed under SAC 996912?

Yes. Fixed charges, demand charges and wheeling charges related to distribution are usually invoiced as part of the electricity bill under SAC 996912. Whether these attract GST depends on how the law and exemptions are applied. Many core distribution related charges follow the same exempt treatment as power.

Can distribution companies claim ITC on taxable services linked to SAC 996912?

Since electricity supply is largely exempt, full ITC on inputs exclusively for that activity is generally blocked. Distribution companies may claim proportionate ITC on inputs used for any taxable outputs they have, as per credit apportionment rules, but not on expenses tied only to exempt supplies.

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.