The labour charges hsn code is really a SAC code: supply of labour and manpower falls under heading 9985 (support services), most often 998519, and GST on it is 18%. A contractor who sends helpers, packers, guards or cleaners to a client's site and bills for them uses a line from this heading, not a goods code.
This guide walks through the six digit lines for staffing, security and housekeeping. It shows where loading charges and cartage really belong, explains when pure labour for a house is exempt and how reverse charge works on guard services, and ends with a ready invoice line. Codes for other kinds of services are grouped on the SAC code hub.
Labour charges: codes and GST rates
Item / SAC / GST- Labour supply not elsewhere classified (SAC 998519)18%Daily or monthly helpers, packers, unskilled workers sent to a client
- Contract staffing (SAC 998513)18%Workers on the agency's rolls deployed for a contract period
- Temporary staffing (SAC 998514)18%Short cover for leave, peak season or a one-off job
- Long-term staffing, payroll services (SAC 998515)18%Agency keeps staff on its payroll for the client over a long term
- Permanent placement fee (SAC 998512)18%Fee for finding a permanent employee, not executive search
- Security guard services (SAC 998525)18% (RCM in some cases)Recipient pays tax if supplier is not a body corporate and recipient is registered
- Housekeeping and general cleaning (SAC 998533)18%Office, factory and society cleaning staff
- Loading and unloading of goods (SAC 996719)18%Cargo handling at godowns, yards and sites
- Loading, unloading, packing or storage of agricultural produceExemptOnly for agricultural produce as the notification defines it
- Pure labour for a single house not in a residential complexExemptLabour only, no material supplied by the contractor
- Pure labour under the government housing scheme for the poorExemptLabour only contracts under that scheme
- Other support services not elsewhere classified (SAC 998599)18%Catch-all line when no named support service fits
Quick facts
SAC heading
9985, support services (group 99851 for employment and labour supply)Most used line
998519 for labour supply; 998513 for contract staffGST rate
18%: 9% CGST + 9% SGST, or 18% IGST to a client in another stateRate before the reform
Also 18%; the reform left manpower supply unchangedDigits to print
4 digits (9985) if turnover is within Rs 5 crore; 6 digits (998519) beyond thatReverse charge
Security services from a non-body corporate to a registered businessCommon wrong code
998596 is event organisation support, not labour supply
Labour charges hsn code inside SAC heading 9985
Every service code in GST starts with 99 and is called a SAC. Billing formats often head the column "HSN", so people search for a labour hsn code when what they need is a SAC. The structure is simple: 99 plus two digits gives the heading (9985), the fifth digit gives the group (99851, employment and labour supply), and the sixth digit names the exact service.
| SAC | What it covers |
|---|---|
| 998511 | Executive or retained search for senior hires |
| 998512 | Permanent placement, other than executive search |
| 998513 | Contract staffing |
| 998514 | Temporary staffing |
| 998515 | Long-term staffing on the agency's payroll |
| 998516 | Temporary staff who later move to permanent jobs |
| 998517 | Co-employment staffing |
| 998519 | Other employment and labour supply not named above |
Choose the line that matches the contract wording. A thekedar (labour contractor) who sends twenty helpers to a factory and bills by headcount usually fits 998519 or 998513. A placement agency charging a one-time fee for a permanent hire uses 998512. All these lines carry the same rate, so the choice mainly decides how your HSN summary in GSTR-1 looks.
GST on labour charges: 18% and the few exemptions
Manpower and labour supply is taxed at 18%. The figure comes from the services schedule in 11/2017-Central Tax (Rate), a notification amended many times; the most recent large change came through 15/2025-Central Tax (Rate), effective 22 September. That notification prints 9% central tax. Add 9% state tax when you and the client sit in one state, or charge 18% IGST when the place of supply lies elsewhere. Services not named anywhere else in the notification also fall under the residual 18% entry, so the labour gst rate does not drop just because a job has an unusual name.
The taxable value is the full amount you bill. For a manpower agency that means wages, PF and ESI contributions, allowances and the service charge together, not the service charge alone. Charging GST only on the margin is a common mistake, and it leaves the agency short of tax when its books are checked.
Only a short list of labour is exempt:
- Pure labour contracts for building a single residential unit that is not part of a residential complex.
- Pure labour contracts under the government housing scheme for the poor.
- Loading, unloading, packing and storage of agricultural produce.
Outside these, plan for 18% on every labour supply bill.
Manpower supply hsn code versus security and housekeeping codes
Agencies that supply people often run several service lines, and each has its own six digits inside 9985.
- Security guards go under 998525 at 18%. Investigation work is 998521 and alarm or surveillance system services are 998523.
- Housekeeping and cleaning belong to group 99853: general cleaning 998533, window cleaning 998532, tank cleaning 998534, pest control 998531. All are 18%.
- 998596 is a frequent wrong pick. It covers organising and assisting events, exhibitions and trade shows, which is explained on the event management codes page.
- 998599 is the leftover line for support services not named anywhere in 9985. Use it only when nothing more exact fits.
Two neighbours from outside 9985 also cause confusion. Labour done on goods that belong to someone else, such as stitching, polishing or machining a client's material, is job work under heading 9988; see the job work code page. Fitting a machine or appliance at the buyer's premises is an installation service, covered under installation charges.
Loading unloading hsn code and cartage charges
Loading charges and unloading charges are cargo handling, not labour supply. The code is 996719, in the transport support heading, and the rate is 18%. A hamali (porter) gang billed by the tonne at a godown or railway siding falls here. The single exception is loading, unloading, packing and storage of agricultural produce, which is exempt.
Cartage is a different matter. If the bill is for carrying goods from one place to another, it is a transport service, not labour, and its code depends on who carries the goods and how. Check the transport charges and freight charges pages before you print a code for cartage on an invoice.
Pure labour in building work and the works contract trap
In construction, the word labour covers two very different contracts. A pure labour contract means the contractor supplies only workers and the owner buys all the cement, steel and sand. A works contract means the contractor brings materials and labour together and hands over finished work.
Pure labour for a single independent house, and pure labour under the government housing scheme for the poor, is exempt. Pure labour on other projects, such as a commercial building or a flat in a complex, is taxable at 18%. Once the contractor supplies material as well, the whole bill becomes a works contract under SAC 9954, and the labour inside it is not billed separately under 9985. Those contract rates are set out under works contract rates in SAC 9954.
Labour charges sac code on the tax invoice
Services follow the same digit rule as goods. A supplier whose aggregate turnover for the last financial year stayed within Rs 5 crore may show only the heading 9985 on B2B invoices. Go past that limit and six digits become compulsory, for example 998519. The HSN digits guide explains the rule in detail.
| Field | Entry |
|---|---|
| Description | Supply of unskilled labour, 30 workers for the month |
| SAC | 998519 |
| Taxable value (wages, PF, ESI and service charge) | Rs 1,20,000 |
| Central tax at 9% | Rs 10,800 |
| State tax at 9% | Rs 10,800 |
| Amount payable | Rs 1,41,600 |
For a client site in another state, drop the two halves and charge one IGST amount of Rs 21,600 at 18%. No e-way bill is needed for a pure service bill, because nothing physical moves on the invoice. Keep the attendance sheet with the invoice; the client's accountant will usually ask for it before releasing payment.
Reverse charge and input tax credit on labour supply
Most labour bills are on forward charge: the supplier charges GST and pays it. Security services are the main exception. When a person other than a body corporate, such as a proprietor or a partnership firm, supplies guards to a registered business, the business pays the GST under reverse charge. Composition taxpayers and government offices registered only to deduct TDS are left out of this rule.
A proprietor's guard agency bills a registered company Rs 40,000 for the month. The invoice shows no GST. The company pays 18%, that is Rs 7,200, in cash under reverse charge and then claims it back as credit if the guards serve its taxable business.
A registered business can take input tax credit on GST paid for labour supply used in its taxable supplies. Credit is blocked under section 17(5) when the labour goes into building your own immovable property, such as an office or godown, other than plant and machinery.
Labour gst rate slips seen in audits
| Slip | Correction |
|---|---|
| GST charged only on the service charge | Charge 18% on the full bill including wages, PF and ESI |
| 998596 used for labour supply | Use 998519 or the right staffing line in group 99851 |
| Loading charges billed under 9985 | Move them to 996719; check if the goods are agricultural produce |
| Labour with material billed as pure labour | Treat it as a works contract under 9954 |
| Proprietor guard agency charging GST to a registered client | Issue the bill without tax; the client pays under reverse charge |
You can confirm any six digit line on the official GST portal HSN and SAC search.
This guide offers general information only. Rates, exemptions and reverse charge lists change whenever a new notification is issued, so confirm the position on the GST portal or in the current notification before billing, and have a GST practitioner or chartered accountant review your own labour agreement.
Frequently asked questions
Which hsn code for labour charges should I print on my bill?
Labour charges use SAC heading 9985, support services. The usual six digit line is 998519 for general labour supply, or 998513 for contract staffing. GST is 18%.
What is the 9985 hsn code gst rate for manpower supply?
Manpower and labour supply under 9985 is taxed at 18%. On the bill it splits into 9% central tax and 9% state tax when the client is in your own state, or appears as a single 18% IGST line when the client is elsewhere. The tax applies to the whole bill, including wages and statutory contributions.
Is 998596 the right code for labour supply?
No. 998596 covers organising and assisting events, exhibitions and trade shows. For labour supply use a line from group 99851, most often 998519.
What is the loading unloading hsn code, and does cartage use the same code?
Loading and unloading of goods is SAC 996719 at 18%, and it is exempt for agricultural produce. Cartage that means carrying goods is a transport service, so check the transport codes instead of using 996719.
Is there GST on labour charges for building my own house?
A pure labour contract for a single residential unit that is not part of a residential complex is exempt. If the contractor also supplies material, the job becomes a works contract under 9954 and is taxable.
What is the security services hsn code, and who pays GST on it?
Guard services use SAC 998525 at 18%. If the agency is a company, it charges the tax on its invoice. If it is a proprietor or firm and the client is a registered business, the client pays the 18% under reverse charge, except composition taxpayers and offices registered only for TDS.