Harmonized System of Nomenclature (HSN) is used for the classification of tracked goods systematically. HSN is a 6 digit code developed by the World Customs Organization (WCO), which is accepted worldwide. The purpose of the implementation of the HSN Code/SAC in GST is to make GST more systematic in India and make it globally accepted.
On the other hand, Service Accounting Code (SAC) is used for the classification of services in a systematic way. This code is provided for recognition, measurement, and taxation of services. All these services start with a number 99, which makes it easy to differentiate between HSN and SAC.
How does HSN/SAC work on the Deskera Mobile App?
When users are creating a product, they are required to fill in the HSN/SAC of particular products. Click on the "Products" icon under the Business Module on the main dashboard menu. A pop-up will appear where you need to create a new product by clicking on the "+" icon.
When you categorize the product type as Goods, tagged it as tracked inventory. For tracked products, you are required to fill in the HSN code.
Alternatively, if you select service as the type of the product, the product will automatically be tagged as Non-tracked goods. Users are required to fill in the SAC code instead of HSN for products labeled as service.
Indicate the HSN/SAC code on the search box, and the products you are looking for will be shown automatically.
Congratulations! You have successfully learned how HSN/SAC works on Deskera Mobile App.
In the next article: Learn India GST: What Is Input Tax Credit Reversal in GST?