HSN and SAC Codes
Harmonised System of Nomenclature (HSN) codes for goods and Service Accounting Codes (SAC) for services, used to classify items on GST invoices in India.
HSN (Harmonised System of Nomenclature) codes are internationally standardised codes used to classify goods for customs and tax purposes. Under India's GST system, all goods on a B2B invoice must carry an HSN code. Businesses with annual turnover above Rs 5 crore must use 6-digit HSN codes; those below use 4-digit codes. SAC (Services Accounting Code) is the equivalent classification system for services.
The GST rate applicable to a product or service is determined by its HSN/SAC code. An incorrect code can mean charging the wrong GST rate, which creates a mismatch in GSTR-1 filings, causes input tax credit issues for your customers, and can attract scrutiny from GST authorities.
In Zoho Books and Zoho Inventory, HSN/SAC codes are assigned at the item level. Once set, every invoice, purchase order, and credit note using that item will carry the correct code automatically. Aaxonix configures the item master with correct HSN/SAC codes as part of every Zoho Books or Inventory implementation.
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