In India, HSN stands for Harmonized System of Nomenclature, and SAC stands for Services Accounting Code. Both codes are used for the classification and identification of goods and services, respectively, for taxation purposes.
1. HSN (Harmonized System of Nomenclature):
HSN is an internationally accepted system for classifying goods based on a hierarchical structure. It is used to categorize goods for the purpose of taxation, customs duties, and statistical analysis. The HSN code consists of six digits, although some countries may use additional digits for more detailed classification. Each digit in the code represents a specific level of classification, starting from the broader category and moving towards more specific subcategories. The HSN code helps in identifying and standardizing the classification of goods for domestic and international trade.
2. SAC (Services Accounting Code):
SAC is a similar classification system but is specific to services rather than goods. It is used to classify services for the purpose of taxation under the Goods and Services Tax (GST) regime in India. The SAC code consists of a six-digit numerical code that helps in the systematic identification and categorization of various services. Similar to the HSN code, the SAC code follows a hierarchical structure, with each digit representing a specific level of classification. It enables proper accounting and taxation of different types of services.
Both HSN and SAC codes are crucial for businesses and government authorities to accurately determine the applicable taxes and comply with tax regulations. The codes facilitate uniformity, transparency, and efficient administration of taxation on goods and services in India.
In India, the classification of products and services under SAC and HSN codes is comprehensive and covers a wide range of goods and services. Here are some examples of the types of products and services that fall under each code:
HSN (Harmonized System of Nomenclature):
The HSN code primarily applies to goods and physical products. It covers various industries and sectors, including:
1. Agriculture and related products (e.g., live animals, vegetables, fruits, grains)
2. Chemicals and chemical products (e.g., pharmaceuticals, fertilizers, dyes)
3. Machinery and mechanical appliances (e.g., vehicles, machinery parts)
4. Electrical equipment (e.g., appliances, lighting fixtures)
5. Textiles and textile articles (e.g., clothing, fabrics, yarn)
6. Metals and metal products (e.g., iron, steel, aluminum)
7. Plastics and rubber products (e.g., plastic goods, tires)
8. Wood and wood products (e.g., timber, furniture)
9. Precious metals and stones (e.g., gold, diamonds)
10. Miscellaneous manufactured goods (e.g., toys, musical instruments)
SAC (Services Accounting Code):
The SAC code is applicable to a wide range of services provided in India. It covers various sectors and industries, including:
1. Professional services (e.g., legal, accounting, consulting)
2. Financial services (e.g., banking, insurance, investment)
3. Information technology services (e.g., software development, IT consulting)
4. Transportation and logistics services (e.g., freight, courier, storage)
5. Healthcare and medical services (e.g., hospitals, clinics, diagnostic services)
6. Education and training services (e.g., schools, coaching, vocational training)
7. Hospitality and tourism services (e.g., hotels, restaurants, travel agencies)
8. Construction and real estate services (e.g., construction, architectural services)
9. Advertising and marketing services (e.g., advertising agencies, market research)
10. Entertainment and media services (e.g., film production, broadcasting, event management)
These examples provide a glimpse into the range of products and services covered by the SAC and HSN codes in India. However, it’s important to note that there are numerous subcategories and detailed classifications within each code to accommodate the specific nature of various goods and services. Businesses and individuals can refer to the official government websites or consult professionals for accurate and up-to-date information on the classification of specific products and services.
