GST HSN or SAC code

It is proposed that, the description of goods and services in the GST Returns may not be required to be submitted by the taxpayer as the same will be identified through the submission of HSN code for goods and SAC Code for services. HSN code must be be furnished in FORM GSTR-1. 

In order to differentiate between the HSN code and the Service Accounting Code (SAC), the latter will be prefixed with “S”.

The taxpayers who have turnover below the limit of Rs 1.5 Crore need not quote the HSN code or SAC instead they will have to mention the description of goods/service, as the case may be, wherever applicable.

The taxpayers who have turnover below the limit of Rs 5 Crore  but over the limit of Rs 1.5 Crore, the HSN codes may be specified at 2-digit chapter level as an optional exercise to start with. This would be mandatory from the second year of implementation of GST. However, the SAC Codes are mandatory.

The taxpayers who have turnover over the limit of Rs 5 Crore, may specify a minimum of 4 digits mandatorily. However, the SAC Codes are mandatory.

Note : For exports , the 8 digit HSN is mandatory irrespective of the turnover.