Software Development Services Under SAC Code 998314
Software development services cover the design, coding, testing and deployment of custom software and applications for clients. Service providers build web applications, mobile apps and integrated business solutions tailored to client needs. These software development services often follow a project or retainer model with ongoing maintenance support. Under GST, such software development services are classified under SAC 998314. This SAC code and its GST rate decide how GST is charged on software development and related IT design service fees.
Software Development Services GST Rate for SAC Code 998314
Management consulting, business consulting, IT consulting and software development services under these SAC codes are treated as professional and technical services under GST. The taxable value normally includes consulting fees, project based charges and retainers, excluding any pure reimbursements that are recovered from clients at actuals with proper supporting documents.
Post the September 2025 rationalisation, most taxable consulting and software development services generally fall within the 18% GST slab with input tax credit for eligible registered recipients. Export of services may qualify as zero rated supplies subject to conditions, and any special notifications for particular service categories should be reviewed before raising invoices.
The table below explains the prevailing GST treatment for SAC code 998314, indicating the usual 18% slab for taxable consulting or software development services and any notified exceptions.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 998314 | Information technology (IT) design and development services | 18% with ITC | 18% with ITC | Software design and development is classified under 9983. Recent overviews note that “most IT services” are taxed at 18% and there is no notification moving this code into a reduced slab. |
Consulting firms and software development companies using this SAC code should mention service value, GST rate in % and GST amount clearly on tax invoices. The same SAC and rate should be mirrored in GSTR 1 and GSTR 3B so that clients can claim input tax credit properly and remain comfortable during any GST assessment or audit.
Explore Other SAC Codes Under 9983
These SAC codes fall under the business and management consulting services group 9983, which covers management consulting, business consulting, IT consulting and software development services. Each six digit SAC within this group focuses on a different style of consulting or technical delivery for GST purposes.
Below are the major related six-digit SAC codes under parent 9983.
Consulting and IT service providers should select the SAC that most accurately describes their primary engagement, whether it is management consulting, wider business consulting, IT consulting services or software development services. Using the correct SAC and GST rate in % makes billing transparent, supports input tax credit for clients and reduces the risk of disputes during GST scrutiny.
Conclusion
Software development services under SAC 998314 include design, coding and deployment of custom software and applications for clients. These services are usually taxed at 18% with input tax credit for eligible business customers, while exports may qualify as zero rated supplies subject to conditions. Software companies should quote SAC 998314 on invoices, apply the proper GST rate in %, separate GST amounts clearly and follow the same treatment in GSTR 1 and GSTR 3B so that clients can justify input tax credit during any GST assessment.
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 998314 cover in GST?
SAC 998314 covers custom software development and application programming services. It includes designing, coding, testing and deploying tailor made software, web applications or mobile apps for clients. The focus is on building new solutions or heavily customising existing platforms to meet specific business requirements and workflows.
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Does SAC 998314 include custom software and application development services?
Yes. Activities such as requirement gathering, UI and UX design, coding modules, integrating databases, testing and delivering finished applications are generally classified under SAC 998314. Both on premise solutions and cloud based custom applications can come under this code when the main deliverable is a developed software product.
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What is the GST rate on software development under SAC 998314?
Custom software development under SAC 998314 is usually taxed at 18%. GST applies on project milestones, time and material billing or fixed price contracts. Where development qualifies as export of services, it may be zero rated. Providers must track location of client and receipt of foreign currency carefully.
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Should web and mobile app development projects use SAC 998314?
Yes. When vendors build websites, portals or mobile applications specifically for one client and not as standard packaged software, they generally use SAC 998314 on invoices. Maintenance, hosting and support might be billed separately under other SAC codes. Clear contracts help separate development from later support services for GST.
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Can clients claim ITC on services billed under SAC 998314?
Registered businesses can usually claim ITC on GST paid for SAC 998314 services if the software supports taxable activities, such as billing, inventory or customer portals. If software is used mainly for exempt services or personal use, ITC is blocked. Companies should document business use of each project.