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In Tally ERP 9, You can  set GST rates  & HSN /SAC Codes at various levels of operation in order to apply gst rates & HSN SAC codes to goods and services during voucher entry to get printed in Invoice and other reports.

Before we go; let’s understand some basics about HSN Code/SAC code

What is HSN Code ?

HSN is the abbreviation of harmonised system of nomenclature, It is a system of naming  ( coding ) Products for quick identification during international trading. This system is developed by World Customs Organisation.  This codes are already in use in India for Import & Export of goods and service.Now implementing HSN code with GST  tax system in India.

GST Act makes it mandatory to print HSN/SAC Code in the  Invoice to the following categories of business based on Turnover.

Business with Turnover  HSN CODE
  Below 1.5 crore Not required
 1.5 crore to 5 crore 2 Digit HSN Code
 Above 5 crore 4 Digit HSN Code
Business deals with Import and export 8 Digit HSN Code
Business deals with service 5 Digit SAC Code

The turnover of the previous year is considered for implementing HSN code with Invoice.

How can we find the HSN Code of the Products?

There are more than 5000 commodity groups under HSN Code system.It is very  difficult to find out a particular product’s HSN code from the GST Portal.  The HSN Code provided in the contains only Four digits. As per GST Act business may require 2 digit codes, 4 Digit HSN Codes and 8 Digit HSN Codes. Let’s understand this.

Example :  Findout the 2 digit, 4 digit & 8 Digit HSN code of PLYWOOD

There are some other websites apart from gst official sites provide you HSN Code.

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Lets use  / which is found more user friendly for me. Access the website in your browser.

Go to Menu  Indian Trade Laws > HS Classification

HS Classification menu

Here you will find  21 sections & 98 chapters of HSN Code.

Section and chapters of HSN Code

Find out the appropriate section of your commodity. Section 9 is found suitable for PLYWOOD, If you found difficult in identifying right section, you can use the search provided at the top of the page.

HSN section and chapter for commdity

In Section 09,  You will Find  Chapter 44 Which states “Harmonised System Codes of Chapter 44: Wood and Articles of wood; wood charcoal“.

As PLYWOOD is the articles of wood. Click on Chapter 44 . In this page you will find Section, Chapter & Heading codes.

Under Heading Code You will find HS CodeS of PLYWOOD, VENEERED PANEL AND SIMILAR LAMINATED WOOD.

HSN Heading code

Now click on Heading code, You will get the more precise classification of plywood & veneer with 8 Digit HSN Code. Choose the right Product HSN Code.

8 Digit HSN Code

So from this example of PLYWOOD The codes can be Identified as

2 Digit HSN Code of PLYWOOD is the Chapter code : 44

4 Digit HSN Code of PLYWOOD is the Chapter Code (44) + Heading Code (12) : 4412

6 Digit HSN Code of PLYWOOD is the  Chapter Code (44) + Heading Code(12) + Product Code : (31) : 441231

8 Digit HSN Code of PLYWOOD is the  Chapter Code (44) + Heading Code(12) + Product Code : (31) + Product Sub Division Code (10) = 44123110.

Hope this helps to findout the HSN Code of the products.

What is SAC Code & How to find out right SAC Code ?

SAC is the service accounting codes for accounting services in India.This coding system is developed by Central Board Of Excise and Customs ( CBEC) Which was in use with service tax regime. Now service tax is subsumed by GST but the code is retained and used in GST for accounting Services.

Download   a List of Services Accounting Code With  Heading Number, Group Number &  Service tarrif code from below link.

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Open the sheet you will Find the code as explained below.

4 Digit SAC = Heading Code : 9954

5 Digit SAC = Heading Code (9954) + Group Code (1) : 99541

6 Digit SAC = Heading Code (9954) + Group Code (1) + Service Code (1) : 995411

SAC Code 4,5 & 6 digit

How to find out GST rate for your product ?

Now we know how to find-out  the HSN/SAC code, Now we want the tax rate of every products we are dealing with. You can get GST rates at various websites, Please find below the best options  selected.

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Configure GST rate HSN/SAC

GST rates and HSN Codes  can be configured at various levels of tally erp 9.

  1. Company Level
  2. Stock group level
  3. Stock Item Level
  4. Ledger Group Level
  5. Ledger Level
  6. Transaction level.

If you set GST rate & hsn/sac more than one level, then tally will consider the rate and code in the following order

GST RATE & HSN,SAC CONFIGURED AT TALLY WILL CONSIDER
Company Level, Stock Group, stock item, ledger group, ledger level & transaction level Transaction Level rate & HSN/SAC
Company Level, Stock Group, stock item, ledger group &ledger level Ledger level rate & HSN SAC
Company Level, Stock Group, stock item & ledger group Ledger group level gst rate HSN & SAC
Company Level, Stock Group& stock item levels Stock item level gst rate & HSN & SAC
Company Level & Stock Group Stock group level rate & HSN SAC
Company level company level rate & hsn/sac

GST Rate HSN/SAC Consideration

GST rate, HSN/SAC setup at Company level

We can configure gst rates &hsn/sac at company features screen or we can say company level. This rate setup is useful when all the goods and service have the same tax rate.

How to setup gst rate at company level ?

To setup GST rate, HSN/SAC at company level. go to

F11 Features > F3: Statutory & Taxation

In the statutory & taxation screen enable the following options.

Enable Goods & service tax ( GST) : Yes

set/alter GST Details : Yes

gst activation screen

GST Details screen will appear,  In the screen enter state, GSTIN, Applicable date as shown in the image also enable.

set/alter GST rate details : Yes.

This will bring rate setup screen,

Gst details screen

Click on F12: Configure

Allow HSN/SAC details : Yes

Show All GST tax type :  YesGST Details configureThis will Bring GST details with HSN /SAC details.

HSN/SAC : 4412

Taxability : Taxable

Integrated Tax : enter the integrated tax, Tally will automatically split state tax & central tax. see the image below.

HSN SAC and tax rate entry

Press enter to save all the screens.Company level gst rate setup is useful for users whose tax rate & HSN/SAC is same for all commodities.

Setup GST rate hsn/sac at stock group level

You can specify GST tax rate, HSN/SAC at stock group level also. This is helpful for those sellers who is having a group of items having same tax rate, HSN/SAC. If we set gst rate hsn/sac at this level all stock item under this group will be used the same rate during invoicing.

How to setup GST rates hsn/sac at stock Group Level ?

To set GST Rates & HSN/SAC at stock group level, Either you have to create or edit an existing stock group . Let’s create a stock group . Before we start make sure that you have activated GST in F11 Features, but do not set rate there.

Go to  Gateway of Tally> Inventory Info> Stock Groups> Create

Create stock group with gst rateSet/alter GST Details : Yes

Press enter, you will get access to a new screen called gst details where tax rate is set.

GST rate hsn code setting for stock groupPress enter key to save both the screens. Now we have set tax rate for stock group.The rate hsn/sac set at stock group will override the rate, hsn/sac set at Company Level.

Setup GST Rates & HSN /SAC at stock item level

GST rate & hsn/sac at stock item level is useful when few items in a stock group or all of the products in a company have different GST rate and code. If few items in a stock group have different rate than the  rate set at the stock group level, then you can specify GST rate and code for individual stock items which will override rate set at stock group level and company level used while invoicing.

How to set GST Rate at stock item level ?

To set the rate at individual stock item level you have to edit existing stock group. Let’s create a GST rate at stock item as mentioned in the above table.

Go to Gateway of Tally> Inventory Info>Stock item >Create

Enter the name, Under group, Units  and in the statutory information

GST Applicable ? : Applicable

Set/alter GST Details : Yes ( Refer below image)

stock item creation with GST Rate

Press enter to get the tax rate definition screen. Then enter Calculation type, and taxability as applicable to you. Enter integrated tax in the given field, refer below image.

GST Rates HSN/SAC settings at stock item level

Press enter to accept and save both the screens. Now you have set the gst rate, hsn/sac code details at stock item level which will override the rate at company level and stock group level.

Setup GST Rate at Ledger Group level

Specifying gst rate &hsn/sac at ledger group level will help you to apply same tax rate for different transactions type like, sales, purchase, sales return & purchase return.

How to set GST Rate at ledger group level?

For example we can set the gst rate to a sales group called local sales under which all local sales ledger are placed.

Gateway of Tally>Accounts Info>Group> Create /Alter 

Set/alter GST Details : Yes

gst stock rate for ledger

Press enter to get gst tax rate details.

Enter Nature of transaction & tax type as shown below.

Ledger Group level SAC /HSN gst rate aettingPress enter to accept and save both the screen.

The rate set at ledger group level will override the rate set at stock item level,stock group level & company level.Tally will consider the rate set at ledger group level even if you have set rate at other levels.

Setup GST rate at ledger level

You can set up GST rate & hsn/sac at ledger level if you want to segregate sales or purchase of item with same tax rate. We can define rate at Sales/Purchase ledgers.

How to set up tax rate at ledger level?

To setup tax rate & hsn  at ledger level, you have to go to ledger creation/alteration screen.

Gateway of Tally> Accounts Info>Ledger >Create

Is GST applicable ? : Applicable

Set/alter GST Details : Yes .

ledger level gst setup

Press enter KEY, GST details screen will appear. enter the tax rate as shown in the below screen.

GST rate hsn sac settings at ledger level

Press enter and accept the screen. The rate & hsn /sac defined at Ledger level will override the rate set at ledger group, stock item level, stock group level & company level.

How to set GST rate at Transaction Level ?

Some times you may want to change the tax rate even after you have set GST rate at some levels of Tally ERP 9.

Example : We have set GST rate at company level and want to create an invoice for exempt sale.That is the tax rate should be NIL in invoice. To do this.

From sales Invoice Press F12 Configure button.Allow modification of tax details

Save configuration screen.

Select The sales ledger, Tax classification details will appear.

tax classifications screen

Select Sales Excempt,

Enter sales details, tax ledger cgst & sgst, You will find the tax amount is calculated as zero. This is because of calculation of gst at transaction level.

HSN/SAC Cannot set at transaction level

Gst rate settings at transaction level

The best practice is that SET tax rate and HSN/SAC in the same level.

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