Management Consulting Services

What this SAC code covers

Covers strategic advisory, operational redesign, performance improvement, and other general management consulting services delivered to corporate or government clients.

Common services billed under SAC 998311

• Strategy advisory
• Operations consulting
• Change management
• Process re-engineering

GST split: CGST, SGST, and IGST

The 18% GST on SAC 998311 splits depending on whether the supply is intra-state or inter-state:

Statutory reference

Notification 11/2017-CT(R) dated 28 June 2017, Schedule II, Heading 9983 — "Other professional, technical and business services," taxable at 18%.

Place of supply

Section 12(2)(a) of the IGST Act — location of the registered recipient. For a multi-state engagement with several recipient entities, raise separate invoices per GSTIN to keep place-of-supply unambiguous.

Export-of-service treatment

Zero-rated under Section 16 of the IGST Act for foreign-client engagements. Common for India-based ex-Big-4 consultants billing US / SG clients — LUT route is the practical default.

Reverse charge (RCM)

Not under reverse charge. Not under reverse charge — the supplier collects and remits GST in the normal forward-charge manner. Reverse charge under Section 9(3) of the CGST Act applies only to a notified list (GTA services, advocate services, sponsorship, director-fee payments by companies, and a handful of others).

Composition scheme for services

Freelancers and small service businesses with aggregate turnover under Rs. 50 lakh in the prior financial year may opt for the composition scheme for services and pay GST at a flat 6% instead of the standard 18%, in exchange for forgoing input tax credit. Useful when your input costs are minimal and your clients do not need ITC (i.e., B2C-heavy practices). Opt in via Form GST CMP-02 on the GST portal at the start of the FY.

Input Tax Credit for the client

Fully claimable by the business client. Consulting fees for legitimate business advisory are not blocked under Section 17(5).

GSTR-1 reporting

GSTR-1 Table 12 (HSN/SAC summary) + Table 4A (B2B). Avoid using 998311 for technical/software work — auditors reading "Management Consulting" against a software-shaped invoice description will flag it.

Worked example

A freelance ex-McKinsey consultant in Delhi (DL state code 07) is engaged by a Mumbai-based logistics company (MH state code 27) for a 6-week operations-redesign engagement. Rs. 1,00,000 monthly retainer. Inter-state → IGST 18% each month.

Invoice of Rs. 1,00,000 under SAC 998311:

• Intra-state client (same state):
  • CGST @ 9%: Rs. 9,000
  • SGST @ 9%: Rs. 9,000
  • Invoice total: Rs. 1,18,000
• Inter-state client (different state):
  • IGST @ 18%: Rs. 18,000
  • Invoice total: Rs. 1,18,000

Related SAC codes

If SAC 998311 does not exactly fit your service, consider these alternatives:

• SAC 998312 — Business Consulting Services — Business consulting other than management consulting.
• SAC 998313 — IT Consulting and Support Services — IT advisory, architecture review and ongoing technical support.
• SAC 998314 — Information Technology Design and Development Services — Custom software development and design — the most common freelance dev SAC.

Related GST terms

Plain-English definitions for the GST concepts behind this SAC:

• GSTR-1 — Monthly or quarterly return of outward supplies (sales) filed by every registered taxpayer.
• GSTR-3B — Monthly summary return where you pay GST liability and claim Input Tax Credit.
• GSTR-2B — Auto-drafted, static monthly ITC statement showing which inward supplies you can claim.
• CGST, SGST, and IGST — Three GST components: Central GST, State GST, and Integrated GST.
• SAC (Services Accounting Code) — 6-digit code that classifies services for GST reporting (the services equivalent of HSN).

Key rules to remember

• SAC is mandatory on every B2B invoice when your aggregate turnover in the preceding financial year was Rs. 5 crore or more. For freelancers below that, SAC is optional but recommended.
• Use 6-digit SAC on invoices issued to GST-registered customers; 4-digit for unregistered customers in B2CS supplies.
• GSTIN-to-state mapping determines intra-state vs inter-state. The first two digits of your GSTIN and your client's GSTIN tell the system which split to apply.
• Place of supply may override location for some services (e.g., events, training). Verify under Section 12 of the IGST Act if your service has a defined place of supply rule.

Common mistakes (CA-flagged)

• Using 998311 for software design / development / coding work — that is 998314, not 998311. The SAC group is "Management Consulting" in the strict sense (strategy, operations, change), not "anything advisory."
• Using 998311 for business / financial advisory by a CA — that is 998223 (Tax Consultancy) or 998212 (Legal Documentation) depending on the deliverable.

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