Software Licensing Under SAC Code 997331

Software licensing services cover the grant of rights to use computer software and databases for a fee, usually through subscriptions, term licences or user based models. Businesses rely on software licensing services to run accounting systems, ERPs, CRMs, database platforms and other applications without buying the underlying intellectual property. Under GST, these services are classified under SAC 997331. This SAC code and its GST rate decide how GST is charged on software licence fees and database access charges.

Live Demo Available Today

Experience the power of Expert Accounting

Join our guided walkthrough to see how BUSY can transform your business operations.

Trusted by 6,00,000+ Users
4.6 Google Rating
+91
expand_more

* No credit card required

997331 SAC Code GST Rate

Review old and new GST rates for Software Licensing under 997331 SAC Code.

Under GST, leasing, rental and licensing services are treated as supply of services even when the underlying item is a movable good or an intangible like software. The taxable value normally includes base rental or licence fees, recurring usage charges and any service components that form part of the agreement price.

After the September 2025 GST slab revision, most taxable rental and licensing services that do not enjoy any special exemption or concessional entry are placed in the 18% slab with input tax credit for eligible registered recipients. Service providers should still track the latest notifications to confirm if any specific relief applies to their sector.

The table below explains the current standard GST rate for SAC code 997331 for computer software and database licensing services.

SAC Code

997331

Description

Licensing services for the right to use computer software and databases.

New Rate

18 %
Standard

Old Rate

12 %

Notes

Historic entries showed 12% for some permanent transfers of IPR and 18% for software IPR, plus a time-bound nil rate for certain sports-event related supplies. Recent SAC-specific tools now show 18% as the working rate for this code. With the 12% slab removed from 22 Sep 2025, the typical rate consolidates at 18% with ITC.

In most practical cases these services are taxed at 18%, and eligible registered business customers can claim input tax credit when the service is used for making taxable outward supplies. Service providers should apply the correct GST rate in % on the invoice value, mention the SAC code clearly and follow the same treatment in their GST records so that compliance stays smooth for both sides.

Stop worrying about SAC & GST compliance

BUSY auto-applies the correct SAC codes & GST rates, ensuring 100% error-free billing every single time.

Automatic Updates
Error-free GSTR
6,00,000+ Happy Users
+91
expand_more

* No credit card required

Explore More SAC Codes Under 9973

Practical Classification Guidance

Service providers should map their main offering to the closest SAC code, whether they rent household linen, clothing, tools, other goods or provide software and database access. Using the correct six digit SAC and GST rate in % makes billing transparent, supports proper input tax credit for customers and reduces the chance of classification disputes during GST checks.

Conclusion

SAC 997331 is used for software licensing services where users get rights to use computer software and databases against licence or subscription fees. These services are typically taxed at 18% under GST, and registered customers may claim input tax credit when the software supports taxable business operations. Choosing SAC 997331 and the correct GST rate in % helps both software providers and clients maintain clean invoicing and GST documentation for digital tools.

Frequently Asked Questions

Clear answers to common queries about SAC Code 997331 and GST compliance.

What does SAC code 997331 cover in GST?

SAC 997331 covers licensing services for software and databases. It includes granting rights to use standard software, access online databases or install on premise software for a fee. This can be one time licence, subscription based access, or renewal of user rights for business or personal use.

Does SAC 997331 include licensing and usage rights for software and databases?

Yes. When a vendor charges for the right to use software, whether download, cloud based or database access, it usually falls under SAC 997331. The customer does not acquire full ownership of the intellectual property but only usage rights as per licence terms, duration and user count.

What GST rate applies to software licence fees under SAC 997331?

Software and database licensing under SAC 997331 is generally taxed at 18%. GST is charged on licence fees, subscription charges and related support if bundled. Special rules may apply where software is classified as goods, but most standard and SaaS type licences are treated as services at this rate.

Are SaaS subscriptions and on premise licences both billed with SAC 997331?

Yes. Most SaaS subscriptions, on premise software licences and database access agreements are billed with SAC 997331, unless clearly covered by a more specific code. The difference is in deployment model, not in GST category. Vendors should describe the licence type clearly so customers understand the service received.

Can businesses claim ITC on GST paid for SAC 997331 licences used for operations?

Registered businesses can usually claim ITC on GST paid for SAC 997331 licences where the software supports accounting, operations, production, marketing or other taxable activities. ITC is not allowed on software used mainly for non business or exempt activities. Proper licence invoices and usage records help support credit claims.

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.