GST SAC Alignment Proposed to End Authorized Services Confusion

The International Financial Services Centres Authority (IFSCA) has issued a consultation paper proposing to align the Default List of Authorized Services approved for SEZ units with the Services Accounting Code (SAC) classification under the GST regime. The current list, rooted in Service Tax–era definitions, has not been updated to reflect SAC-based invoicing, causing mismatches between authorized service descriptions and GST invoices—particularly for IFSC units procuring diverse financial services from the DTA. Stakeholders have highlighted difficulties in service endorsement, interpreting eligibility, and claiming IGST exemptions due to obsolete nomenclature and broad umbrella terms like “banking and other financial services.” To address these challenges, IFSCA proposes a revised Default List mapping existing services to corresponding SAC codes and descriptions to ensure clarity, consistency, and uniform interpretation. A draft mapped list (Annexure A) has been prepared, and public comments are invited via email by 16 February 2026 to refine the proposal and streamline GST compliance for authorized operations.

INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY

Consultation Paper on Alignment of the Default List of Authorized Services approved by the Department of Commerce with SAC Classification under the Goods and Services Tax Regime.

1. Objective

1.1 The objective of this consultation paper is to seek comments, views, and suggestions from stakeholders and the general public on the proposal to align the Default List of Authorized Services approved by the Department of Commerce for Special Economic Zone (SEZ) Units with the Services Accounting Code (SAC) classification prescribed under the Goods and Services Tax (GST) regime.

2. Background

2.1 The Department of Commerce has approved Default List of Authorized Services for SEZ units to avail the GST benefits for their authorized operations. The initial list of 58 services was issued vide Ministry’s letter No. D./12/25/2012-SEZ dated 16.09.2013 and subsequently expanded by various letters and Instructions issued by the Ministry. Currently, the list contains 67 services and power has been delegated to respective DC/UAC to add any service to this list of 67 services.

2.2 The existing Default List of Authorized Services has been formulated with reference to service descriptions and definitions under the erstwhile Service Tax regime.

2.3 Subsequent to the implementation of the GST framework, service providers are required to classify services based on the SAC classification on the tax invoices and statutory filings.

2.4 However, the Default List of Authorized Services which was issued as per the definitions under the erstwhile Service Tax Regime, has not been correspondingly updated to reflect the SAC code based service classification, resulting in divergence between service descriptions found in the List and those mentioned in the GST invoices issued by the suppliers of service located in DTA.

2.5 Specifically for IFSC units, various financial services are utilised from DTA for their authorized operations. The current Default List contains one service namely, “Banking and other financial services” whose definition under Service Tax is quite broad-based including a wide variety of financial services utilized by IFSC units.

3. Issues for Consideration

3.1 Representations have been received indicating that IFSC Units are facing practical difficulties in obtaining endorsement of input services, inter alia, due to the following:

a. Suppliers of service located in DTA mention the SAC codes on tax invoices issued to IFSC units with service descriptions in alignment with such SAC codes. The service descriptions and SAC codes mentioned in such invoices do not align with the nomenclature of services used in the existing Default List of Authorized Services.

b. When it comes to financial services procured by IFSC units, the specific financial service mentioned in the tax invoice usually does not find mention in the Default List of Authorized services, but it may find a place under the umbrella definition of “Banking and other financial services”, which leads to ambiguity in interpretation as to whether such service is available for tax benefit.

c. The nomenclature of services based on Service Tax era definitions are obsolete and require to be updated with the GST-SAC code regime.

3.2 In the absence of such alignment, challenges arise in:

a. Interpreting whether a particular service falls within the scope of the Default List of Authorized Services.

b. Determining the eligibility of such services as authorised services for the purpose of IGST exemption.

c. Availing input services with tax exemption for the day to day operations of IFSC units

4. Proposal

4.1 In order to address the issues identified above, it is proposed that a revised Default List of Authorized Services with service descriptions and definitions aligned to the SAC classification under GST, to ensure consistency and uniform interpretation.

4.2 The proposed alignment is expected to facilitate greater clarity in determining whether input services availed by SEZ Units qualify as authorised services and are eligible for IGST exemption.

4.3 In this regard, the office of Administrator (IFSCA) has prepared a draft list of authorized services wherein the services in the existing list have been mapped with their corresponding SAC code and description. The list is attached herewith as Annexure-A.

5. Public Comments

5.1 In view of the above, the general public and other stakeholders are requested to forward their comments / suggestions / improvements on the draft list prepared by IFSCA.

5.2 The submissions shall be made only through e-mail to Mr. Shobhit Tripathi, AM, IFSCA at shobhit.tripathi@ifsca.gov.in latest by 16.02.2026

5.3 Comments may be provided in the following format:

The comments may kindly be submitted in the following format (MS Word or MS Excel format only):

Annexure A: