Hot Water Distribution Under SAC Code 996922

Hot water distribution services cover supply of steam, hot water and central air conditioning to buildings and industrial users through shared utility networks. Providers operate boilers, chillers, pipelines and control systems so that clients receive steady temperature controlled supply. Under GST, these steam, hot water and air conditioning supply services are classified under SAC 996922. This SAC code and its GST treatment decide how GST is charged on such utility bills.

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996922 SAC Code GST Rate

Review old and new GST rates for Hot Water Distribution under 996922 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 996922, showing the standard 18 % slab where taxable and any exempt utility cases as per notification.

SAC Code

996922

Description

Services involving distribution of steam, hot water and air conditioning supply etc.

New Rate

18 %
Standard

Old Rate

18 %

Notes

Distribution of steam, hot water and air-conditioning is treated like other utility-type services under heading 9969 and taxed at the standard 18% with ITC. No specific entry in the 56th Council documents changes this, so the rate remains 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

Hot water and steam distribution services under SAC 996922 cover shared supply of steam, hot water and central cooling to buildings and industries. These are generally treated as taxable utility services, often at 18 % with input tax credit, because they are commercial and input intensive. Providers should apply the correct GST rate on bills, mention SAC 996922 and keep matching treatment in GST returns so that customers can manage input tax credit smoothly.

Frequently Asked Questions

Clear answers to common queries about SAC Code 996922 and GST compliance.

What is SAC code 996922 in GST?

SAC 996922 covers the distribution of steam, hot water, chilled water and air conditioning through networks, often used in industrial estates or large complexes. It is about centrally generated heating or cooling supplied to users via pipelines or ducts under a service arrangement.

Does SAC 996922 cover distribution of steam, hot water and air conditioning supply?

Yes. When a plant generates steam or chilled water and distributes it to factories, offices or buildings through a network, the service of distribution is classified under SAC 996922. It can also include supply of centrally generated hot or cooled air in district heating or cooling systems.

What GST rate applies to hot water and steam distribution under SAC 996922?

These utility distribution services are usually taxable at 18% under GST. The charge is on the service value or utility usage billed to customers who receive steam, hot water, or chilled water. Any special contracts with different GST treatment should be reviewed against current rules.

Are district cooling or heating networks billed using SAC 996922?

Yes. District heating or cooling schemes where a central plant distributes heat or chilled water to multiple users normally fall under SAC 996922. Invoices to customers show the service value and GST, while businesses receiving such supplies can consider ITC if used for taxable activities.

Is ITC available on GST paid for SAC 996922 services for industrial users?

Industrial and commercial users generally can claim ITC on GST charged for these utility services, provided they use them for taxable manufacturing or service activities. Suppliers can also claim ITC on their own inputs like fuel and equipment used to generate and distribute steam or chilled water.

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.