9954 Construction services
Heading 9954 of the SAC classification covers construction services. The schedule writes 11 entries against it, ranging from 1.5% to 18%, with 18% as the residual rate when no specific entry matches.
- Residual rate18%
- Service codes53
- Schedule entries11
Construction of buildings and civil engineering works, plus the site preparation, special trade, installation and finishing services that go into them. This is the one heading where GST still runs on several special rates, because real estate projects moved to a separate rate structure in April 2019.
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The rate schedule is written against the heading, so these entries govern every service code under 9954. The entry that applies is the one whose description actually matches the supply.
- Nil
- 1.5% applies here
- 5%
- 7.5% applies here
- 12% applies here
- 18% applies here
- 40%
| Entry | What it covers | GST rate | CGST + SGST | Input tax credit |
|---|---|---|---|---|
| (i) | Construction of an affordable residential apartment by a promoter in a Residential Real Estate Project (RREP) that commenced on or after 1 April 2019, or an ongoing project where the promoter did not opt for the earlier rate. Credit is restricted in the manner set out in Annexure II to the notification. The rate applies to the value after the one-third deduction for the land component. | 1.5% | 0.75% + 0.75% | Restricted credit |
| (ia) | Construction of a residential apartment other than an affordable one, by a promoter in an RREP, on the same terms. Credit restricted per Annexure II. The rate applies after the one-third land deduction. | 7.5% | 3.75% + 3.75% | Restricted credit |
| (ib) | Construction of a commercial apartment by a promoter in an RREP, on the same terms. Credit restricted per Annexure II. | 7.5% | 3.75% + 3.75% | Restricted credit |
| (ic) | Construction of an affordable residential apartment by a promoter in a Real Estate Project (REP) that is not an RREP. Credit restricted per Annexure I. The rate applies after the one-third land deduction. | 1.5% | 0.75% + 0.75% | Restricted credit |
| (id) | Construction of a residential apartment other than an affordable one, by a promoter in an REP that is not an RREP. Credit restricted per Annexure I. | 7.5% | 3.75% + 3.75% | Restricted credit |
| (ie) | Construction in an ongoing project where the promoter exercised the one-time option to continue paying at the rate that applied before 1 April 2019. The option had to be exercised in the prescribed form by 20 May 2019 and cannot be revised. | 12% | 6% + 6% | Credit available |
| (if) | Construction of a commercial apartment in an REP that is not an RREP, and construction services not covered by the entries above. | 18% | 9% + 9% | Credit available |
| (vii) | A composite supply of works contract supplied to a Government entity where earthwork makes up more than 75 per cent of the value of the works contract. The concessional rate that applied to this entry was withdrawn with effect from 22 September 2025. | 18% | 9% + 9% | Credit available |
| (viii) | A composite supply of works contract carried out for offshore works relating to exploration or production of petroleum crude or natural gas. The concessional rate that applied to this entry was withdrawn with effect from 22 September 2025. | 18% | 9% + 9% | Credit available |
| (x) | Works contract supplied by a sub-contractor to a main contractor who supplies the service described in item (vii). | 18% | 9% + 9% | Credit available |
| (xii) Residual | Construction services other than those covered above. | 18% | 9% + 9% | Credit available |
More than one entry can apply here. The one that governs is the entry whose description actually matches the supply; where none does, the residual entry sets the rate.
Rates shown here are as published in GST rates on services, Notification 11/2017-Central Tax (Rate) as amended up to Notification 15/2025-Central Tax (Rate) and are reproduced for reference. The GST Council revises rates through notifications, including the rate rationalisation effective 22.09.2025 that withdrew the 12% and 28% slabs for most services and introduced a 40% rate for a short list of them. Always verify the current rate and the conditions attached to it on the CBIC GST rates page or the CBIC tax information portal before invoicing or filing. Rates exclude any applicable cess. IncorpX provides assistance for GST registration and return filing if you need help.
Exempt supplies under 9954
Where an exemption applies it beats the rate schedule, so check these before reading a rate off the table above.
Some supplies under this heading carry no GST at all. An exemption removes the charge rather than setting a rate, so it overrides the schedule where it applies.
- Pure labour contracts for the construction, erection, commissioning or installation of an original works forming part of a housing scheme of the Government, including the Pradhan Mantri Awas Yojana. Notification 12/2017-CT(R), entry 10
- Pure labour contracts for the construction, erection, commissioning or installation of a single residential unit otherwise than as part of a residential complex. Notification 12/2017-CT(R), entry 11
Source: Exempt services, Notification 12/2017-Central Tax (Rate) as amended up to Notification 16/2025-Central Tax (Rate). Exemptions carry conditions and definitions of their own, so read the notification entry before relying on one.
Reverse charge under 9954
On these supplies the recipient pays the GST. The supplier's invoice carries no tax, which is exactly why the mistake is so easy to make in both directions.
On these supplies the recipient pays the GST, not the supplier. The supplier issues an invoice without charging tax and notes that tax is payable under reverse charge; the recipient pays it in cash and claims credit separately if eligible.
Supply of a works contract, or of the shortfall in the 80 per cent inward supplies a promoter is required to buy from registered persons, where the supplier is unregistered.
- Supplier
- Any unregistered person
- Pays the tax
- The promoter
Source: Services taxable under reverse charge, Notification 13/2017-Central Tax (Rate) as amended. Separately from the entries above, any service bought from a supplier outside India is taxable under reverse charge in the recipient's hands, whatever code it carries. Reverse charge entries are amended often, so confirm the current position before you raise or accept an invoice.
53 service codes under 9954
Grouped the way the classification groups them. Open the group that matches your kind of service, then pick the code whose official description covers what you supply.
9954 1Construction services of buildings7
9954 2General construction services of civil engineering works9
9954 3Site preparation services6
9954 4Assembly and erection of prefabricated constructions5
9954 5Special trade construction services9
9954 6Installation services8
9954 7Building completion and finishing services9
Where SAC 9954 is used
The same code, at different digit lengths, runs through your invoices, returns and registration.
Rule 46 requires the SAC code on the invoice for every service line, next to its description and value.
Get assistanceThe HSN/SAC summary table of GSTR-1 reports each code with its taxable value and tax: 4 digits up to Rs. 5 crore aggregate turnover, 6 digits above it.
Get assistanceThe services you supply are described with SAC codes when the registration application is prepared for the GST portal.
Get assistanceThe e-invoice schema validates the SAC field before the IRP returns an IRN, so a wrong code fails at generation rather than at assessment.
Get assistance- Classification: Scheme of Classification of Services, Annexure to Notification 11/2017-Central Tax (Rate), Central Board of Indirect Taxes and Customs (cbic-gst.gov.in).
- Rates: GST rates on services, Notification 11/2017-Central Tax (Rate) as amended up to Notification 15/2025-Central Tax (Rate) (CBIC rate finder).
- Exemptions: Exempt services, Notification 12/2017-Central Tax (Rate) as amended up to Notification 16/2025-Central Tax (Rate).
- Reverse charge: Services taxable under reverse charge, Notification 13/2017-Central Tax (Rate) as amended.
- Current position: GST Council notifications published on the CBIC tax information portal.
This directory reproduces government classifications and rate entries for reference. The official gazette and CBIC notifications remain the authoritative sources. IncorpX provides assistance for registrations and filings that use these codes and does not issue the classification or the rates itself.
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SAC 9954 questions
What does SAC heading 9954 cover?
Heading 9954 of the SAC classification covers construction services. The schedule writes 11 entries against it, ranging from 1.5% to 18%, with 18% as the residual rate when no specific entry matches.
What is the GST rate for heading 9954?
It depends on which entry of the schedule matches the supply. Heading 9954 carries 11 entries at rates from 1.5% to 18%. Where no entry specifically matches, the residual entry applies and the rate is 18%. Several concessional entries are conditional on not taking input tax credit, so read the credit column before choosing.
Are any services under heading 9954 exempt from GST?
Yes. 2 exempt entries touch this heading, including pure labour contracts for the construction, erection, commissioning or installation of an original works forming part of a housing scheme of the Government, including the Pradhan Mantri. An exemption removes the charge rather than setting a rate, so where it applies it overrides the rate schedule.
Does reverse charge apply to services under heading 9954?
Yes, for one notified category. Where reverse charge applies the supplier issues an invoice without charging GST and the recipient pays the tax directly and claims credit separately if eligible. The exact categories are listed on this page.
How many digits of SAC 9954 do I report?
Report all 4 digits of 9954 on invoices and in the GSTR-1 summary if your aggregate turnover is up to Rs. 5 crore, and the full 6-digit code above that. Pick the 6-digit code from the list on this page.
Nebin Binoy 
