Advertising Services

What this SAC code covers

The default SAC for freelance advertising, creative agency services, campaign design, copywriting, and media planning/buying — separate from the digital production work.

Common services billed under SAC 998361

• Ad campaigns
• Ad copywriting
• Media planning
• Campaign design

GST split: CGST, SGST, and IGST

The 18% GST on SAC 998361 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 — taxable at 18%. Distinct from print-media advertisement space (which historically attracted 5% under Heading 9985 but was migrated to 18% under subsequent rate-rationalisation).

Place of supply

Section 12(2)(a) of the IGST Act for B2B (location of registered recipient). Note: for campaigns explicitly targeting a different state, the location of the advertised brand controls — not where the agency runs the work from.

Export-of-service treatment

Zero-rated for foreign-brand campaigns. Common for India-based agencies running performance-marketing for Singapore or US D2C brands.

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. Advertising spend is squarely an allowable business expense + ITC; not blocked under Section 17(5).

GSTR-1 reporting

GSTR-1 Table 12 + Table 4A (B2B). For media-buying engagements where you pass through ad-platform invoices, use 998361 only for your service fee — the underlying Meta / Google ad spend is the client’s direct expense, not yours to re-invoice.

Worked example

Kavya, a Mumbai-based freelance SEO consultant (MH state code 27), runs a 3-month performance-marketing campaign for a Delhi D2C skincare brand (DL state code 07). Rs. 1,00,000 monthly fee. Inter-state → IGST 18% each month.

Invoice of Rs. 1,00,000 under SAC 998361:

• 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 998361 does not exactly fit your service, consider these alternatives:

• SAC 998362 — Marketing Research and Opinion Polling — Market research, opinion polling and consumer surveys.
• SAC 998363 — Public Relations Services — PR strategy, media relations and reputation management.
• SAC 998391 — Specialty Design Services — Industrial, fashion, graphic and other specialty design.

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)

• Bundling media-spend pass-through into the 998361 invoice and charging GST on the whole amount — this inflates your reported turnover and creates double-counting. Bill your fee separately; have the client pay ad platforms directly.
• Using 998361 for SEO consulting that includes no media-buying — that engagement is closer to 998313 (IT Consulting) when it is purely advisory.

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