All About HSN And SAC Code Under GST

GST (Goods and Services Tax) was introduced in India on 1st July 2017 to rationalize the indirect tax structure and bring all indirect taxes under one umbrella. One of the key features of GST is the HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code) codes which play an important role in the GST regime.

What is HSN Code?

HSN is a unique code assigned to every commodity or product under the GST regime. It is an internationally recognized system that classifies goods and their corresponding tax rates. HSN code consists of a six-digit code for products and an eight-digit code for services.

The HSN code is used for the following purposes:

Calculation of GST rates on goods
Identification of goods for statistical purposes
For determining the eligibility of a person for the composition scheme

What is SAC Code?

SAC code is a unique code assigned to every service under the GST regime. It is a system that classifies services and their corresponding tax rates. SAC code consists of six digits like the HSN code.

The SAC code is used for the following purposes:

Calculation of GST rates on services
Identification of services for statistical purposes

Importance of HSN and SAC Codes

The HSN and SAC codes are important for several reasons:

They provide a uniform classification system for goods and services which makes it easier for taxpayers to comply with GST regulations.
They help in determining the correct GST rate applicable to a particular product or service.
They help in the accurate identification of goods and services for statistical purposes.

How to Find HSN and SAC Codes?

HSN and SAC codes can be found in the following ways:

Visit the GST portal and search for the HSN or SAC code for a particular product or service.
Check the invoice or bill of a product or service as it is mandatory to mention the HSN or SAC code on it.

Conclusion

The HSN and SAC codes are an important aspect of the GST regime. They help in the proper classification of goods and services and play a crucial role in determining the correct GST rate applicable to them. It is important for taxpayers to understand the significance of these codes and comply with the regulations accordingly.