Search HSN/SAC Code
What is HSN Code?
HSN, which stands for "Harmonized System of Nomenclature," is a widely accepted method for naming and classifying traded products. Developed by the World Customs Organization (WCO), HSN codes are employed by over 200 countries and regions to enhance the efficiency of international trade.
Amendments in the System
This update marks a significant change in GST regulations. According to the recent GST notification from the CBDT, all taxpayers must now include the GST HSN code on tax invoices for specific products. Previously, this requirement applied only to taxpayers with an annual turnover exceeding five crores. Now, however, the inclusion of the HSN code is mandatory on all tax invoices. Initially, taxpayers were required to report only HSN-wise invoice amounts. Currently, they must specify both the HSN code and rate-wise taxable amounts along with tax details in Table 12 of GSTR-1. Since January 1, 2017, two hundred and thirty-three amendments to the codes have been introduced, which are now followed by countries globally. These amendments include:
The Agricultural sector (85)
The Chemical sector (45)
The Wood sector (13)
The textile sector (15)
The base metal sector (6)
The machinery sector (25)
The transport sector (18)
Other miscellaneous sectors (26)
How to Retrieve the HSN Code List for India Using the HSN Code Finder?
1. Search by Product Title: Enter the name of your product to receive suggestions for the most relevant four-digit HSN code. If you don't find the desired code, click search to view all results. Select the four-digit code to access the six- and eight-digit code details for export-import purposes, along with the HSN code and GST rate.
2. Search by HSN Code: Enter the first two or four digits of the HSN Code. Click on the desired result to learn more about the HSN code.
Scope of Validating HSN Code in India
With the implementation of GST, the introduction of the HSN code in India aligns the country with other nations that have been using HSN for years. India adopted the HSN code to standardize the GST system, which has helped reduce costs associated with international trade by bringing greater harmonization to trade processes.
The HSN code will enable taxpayers in India to easily check the applicable GST rate for their products. The system will automatically determine the relevant tax rate based on the HSN code, streamlining and clarifying trade-related procedures in India. Therefore, it is essential to ensure the correct HSN codes are used when filing GST returns.
HSN Code Structure in India
It consists of two digits each for the Chapter, Heading and Subheading so accordingly
Chapter: Under the HSN module consists of 99 chapters.
The Chemical sector (45)
Subheading: Under these headings consists 5224 subheadings
Subheading: Under these headings consists 5224 subheadings
Regional Tariff*
National Tariff*
The first six digits of the HSN code are fixed according to the guidelines set by the World Customs Organization (WCO). However, the customs authorities have the flexibility to modify the Regional and National Tariff.
Application of the Code in India
The Central Board of Indirect Taxes and Customs issued Notification No. 78/2020 – Central Tax on October 15, 2020, announcing the mandatory implementation of the HSN code.
What If You Wrongly Used The HSN Code?
If an exporter provides an incorrect code, it can cause shipment complications during customs inspections. This may lead to issues such as the rejection of import applications, increased customs duty charges, and penalties for non-compliance.
Using an incorrect HSN Code under GST can prevent the buyer from claiming input tax credit. According to Section 31, an invoice must be accurate in all aspects, including the correct HSN Code classification, to ensure the declaration of input tax credit.
What is SAC?
Service Accounting Codes (SAC) differ from international HSN codes in various aspects. Issued by the Central Board of Indirect Taxes, SACs are used to classify services and determine the applicable tax rates for them. These codes are essential for generating invoices for services provided, serving as a classification system specifically for services rather than goods. All SACs begin with the number 99, distinguishing them as service-related codes.
Service Accounting Codes (SAC) are structured based on the globally recognized Harmonized System of Nomenclature (HSN), which standardizes the classification of goods and services worldwide. This alignment ensures GST compliance adheres to international standards, providing a consistent framework for managing data related to sales and purchases. By using SAC codes, governments can efficiently organize, analyze, and collaborate on transaction data to enhance tax administration and transparency.
Format of SAC
The SAC code is a unique six-digit number that contains two numbers each for
Let us explain this with an illustration. The SAC code for Prevailing construction services of mines and industrial plants is 995425 which consists of
99 is the code that indicates the chapter and constantly continues every time
54 represent civil engineering works under the heading
25 is for standard construction services for plants and mines under the subheading
Difference Between SAC and HSN code
| S.No | Parameters | HSN | SAC |
|---|---|---|---|
| 1 | Full-Form | Harmonized System of Nomenclature | Services Accounting Code |
| 2 | Used For | It assists in the description of GST rates relevant to goods. | SAC is practised in recognizing GST rates relevant to services. |
| 3 | Structure | 8 Digit Code | 6 Digit Code |
Frequently asked questions
HSN stands for Harmonized System of Nomenclature.
No, HSN codes are not applicable to all the industries. These industries include
Manually entering every detail of a dealer can be time-consuming for businesses. To streamline this process, businesses can use HSN codes, which save time and simplify filing. However, it is crucial to select the correct HSN code when submitting details in the GST return to ensure accuracy.
For expert advice on searching HSN codes, Prologic Invoice. is here to assist. The autoTax solution from Prologic Invoice is a fully automated GST software designed for filing returns, reconciliation, and various other functionalities. Our autoTax team ensures that you maintain a high GST compliance rating and stay in the good books of the government. To learn more about how you can automate your taxation lifecycle, connect with [email protected].
The HSN code ensures standardization and global recognition of goods. Under the GST regime in India, it is mandatory for businesses to obtain an HSN code, where applicable, in order to apply the correct tax rates as determined by the relevant authorities.
Any business registered under GST that supplies taxable goods is required to include HSN codes on their invoices.
SAC stands for Service Accounting Code. As mentioned earlier, SAC codes classify services under GST, similar to how HSN codes classify goods.
HSN codes are essential for GST invoices related to taxable goods. Omitting the HSN code can lead to your invoice being considered invalid for tax purposes.
An HSN code acts as a unique identifier for your product within the GST system. It helps determine the applicable GST tax rate, affecting both your tax obligations and the validity of your invoices.
UQC stands for "Unit of Quantity Code." It defines the unit used to measure a good or service for GST purposes (such as kilograms, meters, or pieces). Understanding the UQC is crucial for precise tax calculations and reporting.
Aggregate turnover refers to the total value of all taxable supplies a business makes during a financial year. It helps determine the need for GST registration and the obligations for filing GST returns.
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