Understanding HSN and SAC in Tally Prime: A Guide to GST Compliance

GST – What Is HSN And SAC

The Goods and Services Tax (GST) system in India requires businesses to classify their goods and services using the Harmonized System of Nomenclature (HSN) and the Service Accounting Code (SAC). Tally Prime, a popular accounting software, offers a comprehensive solution for managing HSN and SAC codes for GST compliance.

In this article, we will provide an overview of HSN and SAC codes in Tally Prime and explain their importance in GST compliance.

What are HSN and SAC codes?
HSN codes are a globally recognized system for classifying goods based on their nature, composition, and use. The HSN system is used to identify the goods and their tax rates under GST. SAC codes, on the other hand, are used to classify services provided by businesses.

The use of HSN and SAC codes is mandatory for businesses with a turnover of over Rs. 1.5 crores in a financial year. For businesses with a turnover of less than Rs. 1.5 crores, the use of HSN and SAC codes is optional.

How do HSN and SAC codes work in Tally Prime?
Tally Prime offers a comprehensive solution for managing HSN and SAC codes. The software allows businesses to create and maintain a master list of HSN and SAC codes for their goods and services.

To use HSN and SAC codes in Tally Prime, businesses need to first create a ledger and specify the applicable HSN or SAC code. The software will then automatically apply the relevant tax rate based on the HSN or SAC code.

Tally Prime also provides a range of reports for managing HSN and SAC codes, including the HSN and SAC Summary report, which provides an overview of the tax rates for each HSN or SAC code.

Benefits of using HSN and SAC codes in Tally Prime
Using HSN and SAC codes in Tally Prime has several benefits for businesses, including:

1. Easy compliance: Tally Prime ensures easy compliance with GST regulations by automatically applying the relevant tax rate based on the HSN or SAC code.
2. Accurate calculations: Tally Prime ensures accurate GST calculations based on the prescribed tax rates and applicable laws.
3. Efficient reporting: Tally Prime provides a comprehensive set of reports for managing HSN and SAC codes, reducing the administrative burden on businesses.
4. Time-saving: Tally Prime saves time by automating HSN and SAC code calculations and report generation, allowing businesses to focus on other important activities.

Conclusion
HSN and SAC codes are a crucial component of GST compliance for businesses in India. Tally Prime offers a comprehensive solution for managing HSN and SAC codes, making it easy for businesses to comply with GST regulations and save time and effort in the process. By understanding the basics of HSN and SAC codes in Tally Prime, businesses can streamline their GST processes and ensure accurate and timely compliance.