HSN Code 9954 in India

Learn about HSN Code 9954, its importance in GST, how to determine the correct code, and common mistakes to avoid for accurate tax compliance.
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4 min
24 November 2025

In the realm of Goods and Services Tax (GST) in India, accurate classification of services is paramount. One such classification is HSN code 9954, which pertains to construction services. Understanding this code is essential for businesses in the construction sector to ensure compliance and optimise tax liabilities. If you are planning to expand your construction business, check your business loan eligibility to ensure you have the necessary resources.

What is HSN code 9954 for construction services?

HSN code 9954 encompasses a broad range of construction services. Specifically, it includes:

  • Residential construction: Services related to building single or multi-dwelling units.
  • Non-residential construction: Services for constructing commercial or industrial buildings.
  • Civil engineering works: Infrastructure projects like roads, bridges, and tunnels.
  • Repair and maintenance: Services for the upkeep and renovation of existing structures.

Accurate classification under this code ensures that businesses apply the correct GST rates and comply with regulatory requirements.

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HSN codes under 9954

HSN code 9954 is further subdivided into specific categories to detail various construction services. Some notable sub-codes include:

  • 995411: Construction services of single dwelling or multi-dwelling residential buildings.
  • 995412: Construction services of other residential buildings such as old age homes, homeless shelters, hostels, etc.
  • 995413: Construction services of industrial buildings used for production activities.
  • 995414: Construction services of commercial buildings like office buildings, malls, hotels, etc.
  • 995415: Construction services of other non-residential buildings such as educational institutions, hospitals, etc.
  • 995431: Demolition services.
  • 995432: Site formation and clearance services.
  • 995433: Excavating and earthmoving services.
  • 995434: Water well drilling services and septic system installation.
  • 995441: Installation, assembly, and erection services of prefabricated buildings.

Each sub-code corresponds to a specific type of service, ensuring precise classification and appropriate tax application.

Importance of HSN code 9954

The correct application of HSN code 9954 is crucial for several reasons:

  • Tax compliance: Ensures businesses apply the correct GST rates, avoiding penalties.
  • Input tax credit (ITC): Accurate coding allows businesses to claim eligible ITC.
  • Audit readiness: Proper classification aids in smooth audits and inspections.
  • Financial planning: Helps in accurate costing and pricing of services.

Understanding and applying the correct HSN code is vital for the financial health and compliance of construction businesses. For companies aiming to scale, check your pre-approved business loan offer to ensure smooth cash flow for operations and expansions.

How to determine the correct HSN code 9954

To accurately classify services under HSN code 9954:

  • Identify the service type: Determine whether the service is related to residential, non-residential, civil engineering, or repair and maintenance.
  • Refer to sub-codes: Match the service type to the appropriate sub-code under 9954.
  • Consult GST notifications: Stay updated with the latest GST notifications and amendments.
  • Seek professional advice: Consult with tax professionals or GST consultants for complex classifications.

Accurate determination ensures compliance and optimises tax benefits.

Common mistakes to avoid when assigning HSN code 9954

Businesses often make errors in classifying services under HSN code 9954. Common mistakes include:

  • Misclassifying service types: Assigning the wrong sub-code based on the service nature.
  • Ignoring GST notifications: Failing to stay updated with changes in GST rates and classifications.
  • Overlooking input tax credit eligibility: Not considering input tax credit (ITC) eligibility when applying GST rates.
  • Inconsistent application: Applying different codes for similar services, leading to discrepancies.

Avoiding these mistakes ensures accurate tax application and compliance.

Conclusion

Understanding HSN code 9954 and its subdivisions is essential for businesses in the construction sector. Accurate classification ensures compliance with GST laws, optimises tax liabilities, and aids in financial planning. For businesses looking to expand or invest in new projects, securing financing can be a crucial step. Our business loan is tailored to the needs of construction businesses, providing the necessary capital to grow and thrive.

Helpful resources related to GST & HSN

GST rate for paper

GST on bikes and two-wheelers

Bill to ship to in GST

GST on cycle

Printer HSN code

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GST on stamp duty

Saree HSN code

PVC pipe HSN code

Mobile HSN code

HSN code bearing

HSN code laptop


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Frequently asked questions

What GST rate applies to affordable housing under HSN 9954?

Affordable housing projects under HSN Code 9954 are subject to a reduced GST rate of 1% without the benefit of Input Tax Credit (ITC). This rate applies to projects meeting specific criteria, such as the carpet area and value of the apartments. If you're looking to finance your affordable housing project, check your business loan eligibility to explore funding options that could help support your initiative.

Can ITC be claimed on cement purchases for HSN 9954 projects?
ITC can be claimed on cement purchases for HSN 9954 projects, provided the construction is not for affordable housing. For affordable housing projects, ITC is not available, and the GST rate is reduced to 1%.

Are demolition services covered under HSN 9954?
Yes, demolition services are covered under HSN Code 9954. Specifically, sub-code 995431 pertains to demolition services, which are subject to a GST rate of 18%.

What documents are needed for HSN 9954 GST filing?

For GST filing under HSN Code 9954, businesses need to maintain and submit documents such as:

  • Tax invoices for services rendered.
  • Contracts and agreements detailing the scope of work.
  • Proof of payment for services.
  • Records of Input Tax Credit claimed.
  • Any other documents as specified by GST authorities.

Maintaining accurate and comprehensive records ensures smooth GST filing and compliance. If you're looking to streamline your business finances, check your pre-approved business loan offer to secure the necessary funds for managing your operations and GST obligations effectively.

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