HSN Codeand Service Accounting Code (SAC)
HSN Codeand Service Accounting Code (SAC)
Recently the Ministry of Finance has announced that the 6 digit HSN (Harmonized System of Nomenclature) code or SAC (Service Accounting Code) has been made mandatory for GST taxpayers with a turnover of more than Rs5 crore.
The HSN Codes:
- HSN stands for Harmonised System of Nomenclature code. This was introduced in 1988 by the World Customs Organization (WCO).
- In industry classification systems, harmonized system (HS) codes are generally used in the export process for “goods”.
- There are 21 sections in the HSN code. They are divided into 99 chapters which divided into 1244 sections.
- India has been using the HSN code since 1986 to classify items for custom and central excise.
- Around the world, it is used by customs officials to assess the duties and taxes of products and collect data related to it.
Service Accounting Code (SAC)
- SAC code is related to service accounting.
- It is issued by the Central Board of Indirect Taxes and Customs (CBIC) to classify each service under GST.
Benefits of HSN Code:
- It provides greater ease of working together universally.
- It helps in characterizing the goods, everywhere, for customs and central excise duties across the country.
- It helps in determining uniform tax everywhere in the world.
Source: The Economic Times
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