HSN/SAC Codes Settings
HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code) are statutory classification codes required for GST compliance in India. These codes ensure that goods and services are identified globally and taxed at the correct rates. Note: This configuration is specifically for customers and businesses operating under Indian GST regulations. Access this via Taxes Module -> Settings Tab -> HSN/SAC Codes.
HSN/SAC Codes Inquiry List
This table provides a summary of the classification codes currently available in your system:
- Code: The 4, 6, or 8-digit numerical code for goods (HSN) or services (SAC).
- Description: A brief name or summary of the category (e.g., IT Consulting Services or Steel Bolts).
- Item Tax Type: The specific tax category linked to this code, which determines the GST percentage applied during a sale.
Adding or Updating HSN/SAC Codes
To ensure accurate tax reporting, the following fields must be completed:
- Code: Enter the official HSN or SAC code. Tip: Ensure you use the correct number of digits as required by your business turnover under GST rules.
- Description: Provide a clear description. This helps users verify they are selecting the right code when setting up new inventory items.
- Item Tax Type: Select the default tax rate from the dropdown. By linking the tax rate directly to the HSN/SAC code, the system reduces manual entry errors during item setup.
Integration with Item Master
The HSN/SAC configuration is a "set-and-forget" foundation for your inventory:
- Automatic Link: When you create a new item or service in the Inventory module, you select the HSN/SAC code.
- Pre-filled Data: Once the code is selected on the Item screen, the system automatically pulls the associated Item Tax Type, ensuring that your Sales Invoices always use the legally required GST rate for that specific product or service.
Management Tools
- Add New: Opens a entry row to add a new classification as your product line expands.
- Edit (Pencil Icon): Use this if the government changes the GST rate for a specific HSN code. Updating the Item Tax Type here will update the tax logic for all items linked to this code.
- Delete (Trash Icon): You can remove a code only if it is not currently assigned to any active items or services in your system.
Important Note
Compliance Requirement: Indian GST law mandates that HSN/SAC codes must be printed on all Tax Invoices. By maintaining an accurate list here, the system automatically populates these codes on your professional invoice printouts, keeping your business compliant with GST audit requirements.