HSN/SAC Codes

Unlock the power of GST HSN Codes 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.

GST

What is an HSN Code?

HSN 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 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

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.

Difference between SAC and HSN code

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

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