HSN and SAC Code Search
HSN/SAC Code
Description
HSN/SAC Code
Description
HSN/SAC Code
Description
How to use Karr Tax HSN-SAC Code Finder?
The process of using our HSN-SAC Code Finder is easy and seamless. Here’s how!
Above, you are required to enter the HSN/SAC code or Description and click on “Search.”
What is HSN Code?
HSN, or Harmonized System of Nomenclature, is a global standard for categorizing goods in a systematic manner. It came into effect from the year 1988 and was developed by the World Customs Organization (WCO).
Further, HSN is a 6-digit code that is used to classify more than 5,000 products and is accepted worldwide.
How does the the HSN Code work?
The HSN is a standardized system used globally to name and classify products traded internationally. Adopted by over 200 countries, it covers nearly 98% of all merchandise traded worldwide.
The HSN code plays an important role in taxation, particularly under the GST (Goods and Services Tax) regime, as it identifies a specific product or category.
This system operates under a set of rules that outline the principles and methods of classification. These rules maintain uniformity and accuracy in applying HSN codes and resolve any discrepancies that may arise.
These codes also serve valuable business purposes, like:
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Determine eligibility and benefits under trade agreements
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Ease the trade statistics collection and analysis.
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Provides a common language for product classification.
Understanding the HSN Code
Generally, HSN codes contain:
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21 sections
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99 chapters
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1244 headings
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5224 subheadings
The HSN code follows a hierarchical structure:
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Each chapter is identified by a two-digit HSN number.
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These two-digit numbers are then further classified into four-digit HSN codes.
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Finally, the four-digit HSN codes are subdivided into six-digit HSN codes, offering the most detailed classification level.
Later on, the Customs and Central Excise authorities added two more digits to the 6 digit HSN code to make it more precise. This resulted in a 8-digit classification and was done to align with the GST regime.
Let’s understand this with an example.
As you can see in the image below will be 10.06.30
The first two digits indicate the chapter, i.e., 10, heading 06, and subheading 30.
The HSN (Harmonized System of Nomenclature) code is a classification system used globally to organize and categorize various products. Here’s its importance.
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It provides a systematic and logical method for classifying goods, considering factors like material, function, and origin.
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These codes ensure uniform classification of goods across different countries. This ultimately minimizes the chances of disputes and errors in trade transactions.
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With that being said above, 98% of international trade stock is classified in terms of HSN, which further proves it as best form of international classification.
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As new products emerge or old ones become less common, the HSN system can be updated to reflect these changes.
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Using the same codes worldwide ensures consistency and fairness in trade.
Declaration of HSN Code for Goods and Services
Aggregate Turnover | Type Of Invoices | No of Digits of HSN Code |
|---|---|---|
Above Rs. 5 Crores | All Invoices | 6 Digits |
Upto Rs. 5 Crores | B2B Invoices | 4 Digits |
(Vide CGST notification number 78/2020 dated 15th October 2020)
Note: For all the dealers who are into imports or exports must have 8 digits of the HSN code.
What is SAC Code (Service Accounting Code) in GST ?
SAC code is a classification system used to identify the different types of service and the applicable GST rate for that service.
Based on the Harmonized System of Nomenclature, these codes enable the compliance of GST based on international standards.
Understanding the SAC Code
Let’s say the SAC code for Information technology (IT) design and development services is 998314. (as found using Karr Tax HSN and SAC Code Search)
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The first two digits, i.e., 99, are the same for all services in SAC.
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The next two digits show the nature of services, which here are IT services.
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The last two digits show the detailed nature of services, i.e., Design and Development services.
What is the importance of SAC Codes?
The importance of the SAC code is explained below.
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It maintains uniformity in the tax system and ensures businesses are taxed correctly based on the specified rates.
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Through SAC codes, the different types of services, along with their applicable tax rates, can be found easily.
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It adheres to compliance and simplifies the process of tax calculation and GST return filings.
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These codes can help the Government of India to monitor and collect taxes more efficently.
Frequently Asked Questions (FAQs)
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Is HSN and SAC code the same?
No, HSN and SAC codes are not the same. The difference between them is that HSN codes are meant for goods, while SAC codes are used specifically for services.
2. Will a GST bill be valid without an HSN code?
Absolutely, No! GST bills will not be valid without HSN codes.
3. What is the HSN and SAC code used for?
HSN codes are used to clasify goods; on the contrary, SAC codes are used for the classification of services.
4. Is the HSN code is of 8 digits?
Yes, the businesses engaged in the export and import of goods mandatorily have 8 digits of the HSN code.
5. How can I add/amend the HSN code in the registration under the GST portal?
Here are some of the steps to add an HSN code to the GST portal,
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Open the official GST website and log in.
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Head to the 'Services' section on the dashboard.
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From the 'Services' menu, select 'Registration' followed by 'Amendment of Registration Non-core fields'.
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On the subsequent page, click on the 'Goods and Services' tab.
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Within the 'Goods and Services' section, choose the 'Goods' tab.
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Now, you can search for the relevant HSN chapter by entering the HSN code or the item's name. Then, click on 'Save and continue.'
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Complete the verification process and submit your amendments using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).