GST on installation of an SAD network system is typically treated as a composite supply or works contract, attracting an 18% GST rate on the installation service and variable rates on supplied equipment, depending on item type.
GST Treatment and Classification
Setting up a network system (including SAD or similar infrastructure) is classified as a composite supply of works contract because it involves both goods and service components (installation).
The provision of services for installation, erection, or commissioning is subject to 18% GST under SAC code 9954 (works contract services).
Network-related devices (routers, switches, cables, etc.) usually attract 18% GST under HSN code 8517, but electrical accessories may have rates ranging from 12% to 18%, depending on their type and classification.
Taxation Breakdown
Item/Service GST Rate Tax Code
Installation service 18% SAC 9954
Network equipment 18% HSN 8517
Electrical accessories 12%–18% Various HSN
The place of supply will be where the network system is installed for the client or recipient.
If invoiced together as a single composite supply, the highest applicable GST rate (usually 18%) is typically charged on the total contract value.
Important Considerations
Businesses can typically claim Input Tax Credit on GST paid for both goods and installation services used for commercial purposes.
Ensure accurate item classification for hardware to determine the correct GST rate.
If the installation is a part of a broader project contract, the contract should specify goods and services to help apply differential rates when eligible.
In summary, installation of an SAD network system is usually taxed at 18% GST for the service component, with network equipment also generally falling under the 18% slab, as per current GST law for works contracts and IT-related infrastructure.