Confused between SAC 998391 (Consultancy) and SAC 9954 (Works Contract)? Here is the definitive, no-nonsense GST guide for interior designers, architects, and turnkey contractors in India.
- The crucial difference between SAC Code 998391 (18% pure design consultancy) and SAC Code 9954 (18% composite works contract with materials & labor).
- How Input Tax Credit (ITC) works when purchasing plywood (28%/18%), hardware (18%), and tiles (18%).
- Mandatory elements every interior GST tax invoice must have: HSN/SAC code, GSTIN, place of supply, and CGST/SGST vs IGST split.
- Why milestone advance payments require GST tax receipts under Section 31(3)(d) of the CGST Act.
Tax compliance is often the most neglected part of running an interior design studio in India—until the first GST audit or tax notice arrives.
Many designers either undercharge GST by mixing consultancy rates with material sales or fail to claim lakhs of rupees in Input Tax Credit (ITC) on hardware and plywood purchases. Let's break down the rules clearly.
1. SAC 998391 vs SAC 9954: Which Code Should You Use?
| Service Type | SAC Code | GST Rate | ITC Applicability |
|---|---|---|---|
| Pure Design Consultancy | 998391 | 18% (9% CGST + 9% SGST) | Office rent, software licenses, travel expenses. |
| Turnkey Fitout (Material + Labor) | 9954 | 18% (Composite Supply) | 100% ITC on Plywood, Laminates, Paint, Hafele Hardware, and Glass. |
2. The Intra-State vs Inter-State Tax Split
Always check your client’s site address against your studio’s GST registration state:
- Same State (e.g. Studio in Mumbai, Site in Pune): Charge 9% CGST + 9% SGST.
- Different State (e.g. Studio in Bengaluru, Site in Hyderabad): Charge 18% IGST.
3. Mandatory Invoicing Requirements
Under Indian tax regulations, every interior invoice must clearly display:
- Studio legal name, registered address, and 15-digit GSTIN.
- Client full name, site address, and client GSTIN (for B2B corporate office fitouts).
- Sequential invoice number unique for each financial year (e.g.
PLN/26-27/042). - SAC Code (998391 or 9954) and itemized taxable value before taxes.
- Breakup of CGST/SGST/IGST and dynamic UPI QR code for digital payment settlement.
Expert Q&A on this Topic
What is the GST rate and SAC code for interior design services in India?
For pure interior design consultancy, 3D modelling, and styling services, the applicable SAC code is 998391 (Interior Design & Decoration Services) at an 18% GST rate (9% CGST + 9% SGST for intra-state, or 18% IGST for inter-state).
What SAC code is used for turnkey interior contracting with materials?
Turnkey interior contracts that supply both material and labor together are classified as a 'Composite Works Contract' under SAC 9954, taxed at 18% GST. Under this model, the studio can claim Input Tax Credit (ITC) on raw materials purchased.
Can an interior designer claim Input Tax Credit (ITC) on hardware and furniture?
Yes, if you are executing turnkey projects under a composite supply (SAC 9954) or reselling furniture and materials, you can claim 100% ITC against the GST charged to your client, provided you maintain valid tax invoices from registered GST vendors.
Amit Ballal
Founder & Product Architect, Plannio
Founder and Product Architect of Plannio. Building next-generation operating systems for interior design studios, architects, and turnkey contractors in India.
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