HSN and SAC codes
A number that says what a thing is, so everybody taxing it agrees on what it is.
A number that says what a thing is, so everybody taxing it agrees on what it is.
HSN — Harmonised System of Nomenclature — is an international way of classifying goods by number. India uses it inside GST so that the same product carries the same code from any supplier, and the rate attached to it is not a matter of opinion.
SAC is the same idea for services. A salon, a transporter and a consultant use SAC codes where a shop would use HSN.
The code gets more specific as it gets longer. The first two digits are the chapter, the next two the heading, and further pairs narrow it down to the exact article. More digits means a more precise description of the goods.
How many digits you must show depends on your turnover, and that rule has changed more than once — check the current requirement on the GST portal rather than trusting any number written on a website, including this one.
On the item master, not typed onto each bill. Record it once when you create the product and every invoice, every return and every HSN summary is right from then on without anybody remembering. Typing it per bill is how the same product ends up under three different codes in one year's returns.
GST returns ask for a summary of your sales grouped by HSN — quantity and value per code rather than per bill. If the code lives on the item, that summary is a reading of bills you already raised rather than an exercise at the end of the month.
Aned Book keeps HSN on the item master and prints an HSN summary from the same bills.
HSN classifies goods, SAC classifies services. A bill can carry both if you sell both.
It depends on turnover and the rule has changed more than once. Check the current requirement on the GST portal.
On the item master, once. Then every bill, return and HSN summary is right without anybody retyping it.
Aned Book works the tax out from the bill you are raising, so none of the above is a decision anybody has to make at a busy counter.