Water Distribution Services Under SAC Code 996921
Water distribution services cover supply of water from treatment plants to homes, offices and industrial users through pipelines. Providers manage pumping, storage, pipelines and metering so that users receive clean and adequate water. Under GST, these water distribution and water supply services are classified under SAC 996921. This SAC code and its GST treatment decide how GST applies on water supply charges and service fees. This helps homes and industries receive dependable water supply for daily and process use.
Water Distribution Services GST Rate for SAC Code 996921
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 996921, showing the standard 18 % slab where taxable and any exempt utility cases as per notification.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 996921 | Water distribution services | 18% with ITC | 18% with ITC | This covers water distribution as a taxable service (for example, industrial or commercial water supply). Typical GST rate is 18% with ITC. Supply of water for domestic / personal use by government or local bodies is separately exempt; that exemption continues and is not altered by the 56th meeting. |
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.
Explore Other SAC Codes Under 9969
These SAC codes are part of the utility distribution group 9969, which covers transmission and distribution of electricity, gas, water, steam and similar utilities. Each six digit SAC in this group captures a specific utility type or distribution model for GST classification.
The list below highlights key six-digit SAC codes under 9969
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
Water distribution services under SAC 996921 cover supply of water to residential and commercial users. Certain essential water supply services may be exempt, while packaged or commercial supplies can be taxable, often at 18 % on the service component. Service providers should separate exempt and taxable activities, apply the correct GST rate in each case and maintain clear records in GST returns to avoid disputes.
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.