HSN/SAC Codes

Unlock the power of GST HSN Codes finder with our comprehensive resource. HSN Codes play a vital role in accurately classifying goods and services, simplifying tax calculations, and ensuring compliance. Dive into the intricacies of this standardized coding system, understand its significance, and explore the extensive list of codes for seamless business operations. Stay ahead of the curve and maximize your understanding of GST HSN Codes with our informative webpage.

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    What is an HSN Code?

    HSN code stands for Harmonized System of Nomenclature. HSN was established and industrialised by the WCO (World Customs Organization) in 1988. Since then, five revisions have already been made worldwide. GST HSN code states more than 5000 goods and is primarily practised by more than 150 countries. This 6-digit HSN code list can be utilised to classify more than five thousand commodities and is further applied for tax objectives classification. The Customs and Central Excise attached two more digits later to advance HSN code search for more reliable differentiation. It is a globally trusted multipurpose instrument for indirect taxes. More than 95% of the industry is currently monitored under the WCO, and each country is revising it, including India.

    How does HSN Code Work?

    It has about 5,000 commodity groups, each identified by a six-digit code, arranged in a legal and logical structure. It is supported by well-defined rules to achieve uniform classification.

    Why is HSN Code important?

    The main purpose of HSN is to classify goods from all over the World in a systematic and logical manner. This brings in a uniform classification of goods and facilitates international trade.

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    Understanding the HSN Code

    The HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and 5,224 subheadings.

    • Each Section is divided into Chapters. Each Chapter is divided into Headings. Each Heading is divided into Sub Headings.
    • If the principal moves the items across state borders to the employee.
    • Section and Chapter titles describe broad categories of goods, while headings and subheadings describe products in detail.

    Services Accounting Code (SAC) in GST

    Like goods, services are also classified uniformly for recognition, measurement and taxation. Codes for services are called Services Accounting Code or SAC

    For example:

    Legal documentation and certification services concerning patents, copyrights and other intellectual property rights– 998213

    • The first two digits are same for all services i.e. 99
    • The next two digits (82) represent the major nature of service, in this case, legal service
    • The last two digits (13) represent detailed nature of service, i.e., legal documentation for patents etc.

    Application of the code in India

    Notification No. 78/2020 –Central Tax, dated 15 October 2020 was published by the Central Board of Indirect Taxes and Customs to inform that the implementation of HSN code is mandatory.

    What If You Wrongly used The HSN Code?

    If you have stated an inaccurate code as an exporter, it can lead to shipment difficulties during customs review. There can be problems like denial of import opportunities, heavy custom duty assessments, non-compliance punishments etc.

    If you have used an incorrect HSN Code under GST, the buyer will not be able to claim his input tax credit. As per Section 31, an invoice must be flawless in all phases, including accurate HSN Code classNameification for declaring the input tax credit.

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    HSN Worldwide

    The Harmonized System of Nomenclature (HSN) is an internationally recognized system for classifying products, widely used in global trade. Developed by the World Customs Organization (WCO), HSN codes are used to standardize the classification of goods for customs purposes. In GST, the HSN code is used to classify products for tax rates and compliance. It is a universal system adopted by over 200 countries, making it easier for businesses to engage in cross-border trade, as they adhere to a common system that simplifies customs documentation, trade negotiations, and global supply chains.

    How can I find my product in HSN list and its relevant HSN Code?

    To find your product’s relevant HSN code, you can refer to the HSN list provided by the GST portal or search for it through a reliable online database. Look for your product’s category and subcategory, and note the HSN code assigned to that classification. Alternatively, you can use a search tool in your accounting software, like BUSY, to find the correct code by entering product names or descriptions.

    What is UQC?

    UQC stands for Unit Quantity Code, used in the GST system to specify the unit of measurement for goods and services. It ensures that transactions are recorded accurately, and proper tax calculations are made. UQC is used to identify various units like kilograms, meters, liters, or pieces, depending on the nature of the product. This standardization helps in maintaining consistency and accuracy in GST filings and ensures businesses use the correct units while generating invoices or reporting sales.

    What is UQC in GST?

    In GST, UQC refers to the Unit Quantity Code, a standardized system for classifying units of measurement. It ensures uniformity when reporting the quantity of goods or services in GST returns and invoices. Examples include kilograms (KGS), liters (LTS), or pieces (PCS). Using the correct UQC helps businesses maintain accurate records, prevent errors, and comply with GST regulations.

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    Difference between SAC and HSN code

    S. No. Parameters HSN SAC
    1 Full Form Harmonized System of Nomenclature Service Accounting Table
    2 Used For It assists in the description of GST Rates relavant to goods. SAC is practised in recognizing GST rates relavant to services.
    3 Structure 8 Digit Code 6 Digit Code

    List of HSN Codes (Chapters 1-98)

    Section 01 – LIVE ANIMALS, ANIMAL PRODUCTS

    Section 02 – VEGETABLE PRODUCTS

    Section 03 – ANIMAL OR VEGETABLE FATS AND OIL AND THEIR CLEAVAGE PRODUCTS; PREPARED EDIBLE FATS; ANIMAL OR VEGETABLE WAXES

    Section 04 – PREPARED FOOD STUFFS, BEVERAGES, SPIRITS AND VINEGAR, TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES

    Section 05 – MINERAL PRODUCTS

    Section 06 – PRODUCTS OF THE CHEMICAL OR ALLIED INDUSTRIES

    Section 07 – PLASTICS AND ARTICLES THEREOF, RUBBER AND ARTICLES THEREOF

    Section 08 – RAW HIDES AND SKINS, LEATHER, FURSKINS & ARTICLES THEREOF; SADDLERY AND HARNESS; TRAVEL GOODS, HANDBAGS AND SIMILAR CONTAINERS; ARTICLES OF ANIMAL GUT (OTHER THAN SILK- WORM GUT)

    Section 09 – WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL; CORK AND ARTICLES OF CORK; MANUFACTURES OF STRAW, OF ESPARTO OR OF OTHER PLAITING MATERIALS; BASKETWARE AND WICKERWORK

    Section 10 – PULP OF WOOD OR OF OTHER FIBROUS CELLULOSIC MATERIAL; RECOVERED (WASTE AND SCRAP) PAPER OR PAPERBOARD; PAPER AND PAPERBOARD & ARTICLES THEREOF

    Section 11 – TEXTILE & TEXTILE ARTICLES

    Section 12 – FOOTWEAR, HEADGEAR, UMBRELLAS, SUN UMBRELLAS, WALKING-STICKS, SEAT-STICKS, WHIPS, RIDING-CROPS AND PARTS THEREOF, PREPARED FEATHERS AND ARTICLES MADE THEEWITH; ARTIFICIAL FLOWERS; ARTICLES OF HUMAN HAIR

    Section 13 – ARTICLES OF STONE, PLASTER, CEMENT, ASBESTOS, MICA OR SIMILAR MATERIALS; CERAMIC PRODUCTS; GLASS AND GLASSWARE

    Section 14 – NATURAL OR CULTURED PEARLS, PRECIOUS OR SEMI-PRECIOUS STONES, PRECIOUS METALS CLAD WITH PRECIOUS METAL AND ARTICLES THEREOF; IMITATION JEWELLERY; COIN

    Section 15 – BASE METAL & ARTICLES OF BASE METAL

    Section 16 – MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT AND PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES

    Section 17 – VEHICLES; AIRCRAFT; VESSELS & ASSOCIATED TRANSPORT EQUIPMENT

    Section 18 – OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, MEASURING, CHECKING, PRECISION, MEDICAL OR SURGICAL INSTRUMENTS AND APPARATUS; CLOCKS AND WATCHES; MUSICAL INSTRUMENTS; PARTS AND ACCESSORIES THEREOF

    Section 19 – ARMS AND AMMUNITION; PARTS AND ACCESSORIES THEREOF

    Section 20 – MISCELLANEOUS MANUFACTURED ARTICLES

    Section 21 – WORKS OF ART, COLLECTORS’ PIECES AND ANTIQUES

    List of SAC Codes (Chapter 99)

    9954 – Construction services

    9961 – Services in wholesale trade

    9964 – Passenger transport services

    9965 – Goods Transport Services

    9966 – Rental services of transport vehicles with or without operators

    9967 – Supporting services in transport

    9968 – Postal and courier services

    9971 – Financial and related services

    9972 – Real estate services

    9973 – Leasing or rental services with or without operator

    9981 – Research and development services

    9982 – Legal and accounting services

    9983 – Other professional, technical and business services

    9984 – Telecommunications, broadcasting and information supply services

    9985 – Support services

    9986 – Support services to agriculture, hunting, forestry, fishing, mining and utilities.

    9987 – Maintenance, repair and installation (except construction) services

    9988 – Manufacturing services on physical inputs (goods) owned by others

    9989 – Other manufacturing services; publishing, printing and reproduction services; materials recovery services

    9991 – Public administration and other services provided to the community as a whole; compulsory social security services

    9992 – Education services

    9993 – Human health and social care services

    9994 – Sewage and waste collection, treatment and disposal and other environmental protection services

    9995 – Services of membership organizations

    9996 – Recreational, cultural and sporting services

    9997 – Other services

    9998 – Domestic services

    9999 – Services provided by extraterritorial organizations and bodies.

    Frequently Asked Questions

    • What is the full form of HSN in GST?
      The full form of HSN in GST is Harmonized System of Nomenclature. It is a globally recognized system used to classify goods for customs, trade, and tax purposes. Under GST, HSN codes are used to determine the correct tax rates for products and ensure compliance with the law.
    • Who is eligible for HSN code in GST?
      All businesses dealing with goods under GST are required to use HSN codes. The number of digits required (4, 6, or 8) depends on the turnover of the business. For businesses with a turnover above ₹5 crore, a 6-digit or 8-digit HSN code is mandatory for GST filings.
    • Is HSN code 4 digit or 8 digit?
      HSN codes can be either 4, 6, or 8 digits long. A 4-digit HSN code is used for broad product categories, while 6 and 8-digit codes provide more detailed classifications. The length of the HSN code depends on the level of detail required and the business’s turnover.
    • What is 4 digit and 6 digit HSN code?
      A 4-digit HSN code is used for general categories of goods, while a 6-digit HSN code provides more detailed classification within those categories. The 6-digit code is more specific and is required for businesses with higher turnover. The 4-digit code is typically used by smaller businesses or for broader categories.
    • How do I check which items have missing HSN codes in my GSTR file?
      Step 1: Go to the Display section and click on GST Reports.
      Step 2: Select GST Returns, then choose GSTR-1 e-return.
      Step 3: Choose the preferred method for generating the GSTR-1 (direct upload, JSON, CSV, or Government Template).
      Step 4: Set the report’s date range and click OK. Then, click on Check errors in HSN.
      Next, if HSN/SAC codes are missing, an error message will appear, prompting you to press Enter. Click on Transaction Details and add the HSN/SAC code in the item master.
    • How do I change tax rates or HSN codes?
      To change the tax rates and HSN code of items in BUSY, follow these steps:
      Step 1: Open your company, go to the Administration tab, and click on Masters.
      Step 2: Select the item and click on Modify.
      Step 3: Choose the item for which you want to update the tax rate and HSN code.
      Step 4: Update the tax rate in the Tax Category field and the HSN code in the HSN/SAC Code for GST field.
      Step 5: Click Save to apply the changes and close the window.
      Note: Make sure to back up your data before making any changes.
    • How do I configure tax rates and HSN codes for Item master in BUSY during setup?
      To configure tax rates and HSN codes in BUSY during setup, follow these steps:
      Step 1: After creating a new company and enabling GST, the software will automatically generate predefined masters.
      Step 2: Open the software, go to Administration, then Masters, and select Item Master.
      Step 3: Click Add to create a new item or Modify to update an existing one.
      Step 4: Locate the HSN code field.
      Step 5: Assign the appropriate HSN code to each item or service and validate it.
      Step 6: Save the changes.
      These steps will ensure tax rates and HSN codes are configured correctly in BUSY during setup.
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