FAQ HSN Master

Created by Gokul Krishnan Krishnan, Modified on Tue, 26 Mar, 2024 at 3:22 PM by Gokul Krishnan Krishnan

Q1. How does the HSN/SAC code work along with a product or a service?

Ans: All the products created in the product master are mapped against a HSN/SAC code. As per the tax compliance, Zetwerk uses only 8 digit HSN code and 6 digit SAC codes. During the selection of a product at transactions, the relevant HSN/SAC code will be auto-populated and freezed. Incase, if a new HSN/SAC has to be added to the master, the BU team has to raise a product creation request

Q2. What is HSN Code?

Ans: The HSN code is a numerical code assigned to each product or item within the HSN system. It helps in standardizing the classification of products for the purpose of tariff, taxation, and regulatory requirements. Each HSN code corresponds to a specific product category and can be used by governments, businesses, and organizations to accurately identify and classify goods for import, export, taxation, and statistical purposes. In Zetwerk, we use only 8 digit HSN code for transactions as per Tax compliance

Q3. How Many Digit HSN codes can be used at zetwerk?

Ans: As per the tax team compliance, Zetwerk is using only 8 digit HSN codes

Q4. What is INVALID Flag of HSN?

Ans: In the pre-HSN master go-live, multiple random codes were used in the transactions. All these invalid HSN’s are marked as invalid in OMS system so that these invalid codes cannot be used in any further transactions

Q5. Can one HSN code have multiple tax rates?

Ans: Yes, one HSN code can have multiple tax rates as per Clear Tax portal - link here.

Q6. What is SAC Code?

Ans: The SAC code is a unique code assigned to each type of service, and it helps in identifying and categorizing services for the application of GST. This code is based on a hierarchical structure, where different digits represent different levels of classification. The more specific the code, the more detailed the classification of the service.

Q7. Can we change the HSN/SAC of the existing product in the master?

Ans: The products are created with HSN/SAC codes. Hence, changing the HSN/SAC codes will affect the transactions happening for that specific product. Hence, changing the HSN/SAC for the products is not advisable

Q8. If I want to check HSN Validity Etc, What references should I use?

Ans: In Zetwerk, the HSN/SAC validity is checked using Cleartax portal - Link here. Also, one can refer to the Govt GST portal - Link here