How to Validate HSN and SAC Codes in Tally Prime

Incorrect HSN (Harmonised System of Nomenclature) or SAC (Service Accounting Code) codes on GST invoices cause mismatches in GSTR-1, leading to ITC reconciliation issues for buyers and potential notices from the GST department.

This guide explains how to validate HSN/SAC codes using the GST portal and configure Tally Prime for automatic code validation.

1. HSN and SAC Code Basics

HSN codes classify goods using a hierarchical numeric code system developed by the World Customs Organization. In India, goods use 8-digit codes for customs and GST purposes. SAC codes are 6-digit codes that classify services for GST.

The HSN code determines the applicable GST rate. Using the wrong code can result in collecting incorrect tax and filing erroneous returns.

2. Validating HSN Codes on the GST Portal

1. Visit gst.gov.in → Services → User Services → Search HSN Code.
2. Enter the product description keyword (e.g., "mobile phone") or the HSN code directly.
3. The portal returns the full HSN description, applicable chapter, and current GST rates (CGST + SGST / IGST).
4. Cross-check the code and rate against what is configured in your Tally stock items.

3. Configuring HSN Codes in Tally Stock Items

1. Go to Gateway of Tally → Alter → Stock Item and select the product.
2. In the GST Details section, enter the correct HSN/SAC Code (8-digit for goods, 6-digit for services).
3. Set the Tax Rate (e.g., 18% GST) to auto-apply on all invoices using this item.
4. Save the item. Going forward, all sales and purchase vouchers using this item will carry the correct code.

4. Checking the HSN Summary Before Filing GSTR-1

Before uploading GSTR-1, verify the HSN Summary in Tally:

1. Go to Gateway of Tally → Display → Statutory Reports → GST → GSTR-1.
2. Navigate to the HSN/SAC Summary section.
3. Review each HSN code, quantity, taxable value, and tax amount. Any items without HSN codes will appear separately — configure them before filing.