SAC replace by HSN CODE

[SURYAKANT MITHBAVKAR]

We have noticed that SAC is replaced by HSN Code. If it is ok any notification is there.

[MADAN RAHEJA]

Service Accounting Code (SAC) is only in respect of services and not in respect of goods. As regards goods, the notifications determining GST rates have made the tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, applicable to GST. Even Rules of interpretation of this Tariff has been made applicable. Since this tariff is based on HSN, it cannot be said that HSN has been replaced. Further under Rule 46 of Central Goods and Services Tax Rules, Notification No. 12/2017-CT has been issued requiring mentioning of HSN code on invoices based on aggregate turnover.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Sri Madan.

[Debtosh Dey]

There is a confusion amongst many entities since Service Tariff Codes (6 digit) have also been published under GST to classify services. Some entities are indicting these on invoices instead of SAC (8 digit). This may further entail confusion since SAC pertained to erstwhile services defined under Finance Act while many of these may not coincide with the new classification.

Debtosh Dey

AI Summary

HSN code usage clarified: HSN governs goods classification while SAC remains applicable to services; invoices must reflect HSN.
SAC remains the classification mechanism for services while goods classification under GST follows the tariff structure in the First Schedule to the Customs Tariff Act based on HSN and its rules of interpretation; thus HSN has not replaced SAC. Additionally, Rule 46 of the Central Goods and Services Tax Rules and Notification No. 12/2017-CT require HSN codes on invoices as applicable, and use of published six-digit service tariff codes in place of eight-digit SAC may cause misclassification.