R&D Services Under SAC Code 998111
Natural Sciences Research Services services allow businesses to use specialised resources or knowledge without owning them fully. In day to day work, clients pay a fee or royalty so that they can access these rights or research outputs for their own projects, products or operations.
SAC 998111 is used when the main service is research and experimental development services in natural sciences for discovering and testing new concepts, materials and processes. In simple terms, this code applies where the core agreement is about giving permission or carrying out focused research instead of selling physical goods.
In real life, these services are common in areas like research and experimental development in physics, chemistry, earth and environmental sciences. Using the correct SAC 998111 under GST helps both service providers and clients keep invoices clear and GST treatment consistent.
R&D Services GST Rate for SAC Code 998111
From a GST point of view, natural sciences research services fees are treated as supply of services. The taxable value usually includes upfront licence fees, recurring royalties, minimum guarantee amounts, renewal charges and any related service or support fees that form part of the same agreement.
After the September 2025 GST revision, most licensing and research based professional services that do not have any special notification continue to fall under the standard 18% slab. Registered business recipients can generally claim input tax credit when these services are used for making taxable supplies, subject to normal ITC conditions.
The table below sets out the current standard GST rate for SAC code 998111.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 998111 | Research and experimental development services in natural sciences | 18% with ITC | 18% with ITC | Research and experimental development services in natural sciences continue to attract 18% with ITC. They are not listed among the services getting a reduced slab in the 56th Council summary; the general standard rate of 18% for such professional / technical services remains. |
In practice, service providers who offer natural sciences research services should apply 18% GST on the taxable value, quote SAC 998111 on tax invoices and keep the same classification in their GST records so that billing and input tax credit remain simple to review.
Explore Other SAC Codes Under 9981
SAC 998111 falls under the wider heading 9981, which covers research and development services across different subject areas. Each six digit SAC under this heading points to a particular research focus so that contracts and GST treatment match the actual work done.
These are the main related six-digit SAC codes under 9981.
When selecting a code from the 9981 family, businesses should choose the SAC that best describes the central activity, whether it is natural sciences research services or some other related service in the same group. Correct use of the six digit SAC and GST rate in % helps avoid disputes, keeps pricing transparent and makes input tax credit planning easier for both sides.
Conclusion
SAC 998111 is meant for natural sciences research services where clearly defined rights or research work are supplied in return for a fee or royalty. These services are generally taxed at 18% under GST, with ITC normally available to eligible registered recipients when they use the service for taxable business activities. By classifying bills under SAC 998111 and applying the correct GST rate in %, businesses can keep their contracts, invoices and GST compliance neat and easy to support during reviews or audits.
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.
Frequently Asked Questions
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What does SAC code 998111 cover in GST?
SAC 998111 covers research and experimental development services in natural sciences, such as physics, chemistry, biology and related fields. It includes laboratory studies, experiments, analytical work and scientific investigations carried out for businesses, institutions or government bodies, usually on a contract, grant or collaborative research basis.
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Does SAC 998111 include research and development services in natural science fields?
Yes. Projects involving fundamental or applied research in areas like materials, energy, environment, basic biology or physical sciences are generally classified under SAC 998111. These services often support new product development, process improvements, safety assessments or regulatory submissions for client organisations or collaborative programmes.
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What GST rate applies to scientific R&D services under SAC 998111?
Scientific R&D services under SAC 998111 are usually taxed at 18%. GST is levied on research fees, project retainers and milestone payments. Certain government funded or approved research projects may have special concessions, so both research providers and clients should confirm prevailing GST rules before finalising contracts.
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Should labs and research firms use SAC 998111 when billing experimental studies?
Yes. Independent labs, research institutes and private R&D companies carrying out experiments and scientific studies should mention SAC 998111 on invoices covering natural science projects. This clarifies the nature of service for GST purposes and separates it from testing, consultancy or routine analysis covered under other SAC codes.
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Can clients claim ITC on GST paid for SAC 998111 services used for business R&D?
Businesses can generally claim ITC on GST paid for SAC 998111 services if the research supports their taxable production, product development or service offerings. If research relates to exempt activities or purely CSR work, ITC may not be available. Proper agreements and project documentation help justify ITC claims.