HSN and SAC Codes in TallyPrime: Setup and Digit Rules
Where to set HSN and SAC codes in TallyPrime, which master TallyPrime reads them from, and how many HSN digits your GSTR-1 needs.
HSN (for goods) and SAC (for services) codes appear on your GST invoices and in the HSN summary of GSTR-1. Getting them right in TallyPrime once saves corrections every month. This guide explains where to set the HSN code in TallyPrime, how TallyPrime decides which code to use, and how many digits your returns need.
How many HSN digits do you need?
Under Notification 78/2020-Central Tax, the number of HSN digits in Table 12 of GSTR-1 depends on your aggregate annual turnover (AATO) in the previous financial year:
| AATO in the previous year | Minimum HSN digits |
|---|---|
| Up to Rs 5 crore | 4 digits |
| Above Rs 5 crore | 6 digits |
Using a more detailed code than the minimum is fine. For what else a GST invoice must contain, see our guide to GST bill format and mandatory fields.
Where you can set HSN and SAC in TallyPrime
TallyPrime lets you set GST rate and HSN/SAC details in several masters: the company, a ledger group, a sales or purchase ledger, a stock group or a stock item. In each master you can choose:
- Specify Details Here to enter the code and rate in that master; or
- As per Company/Group to inherit them from a higher level.
Tally's guide to managing HSN/SAC and tax rates in TallyPrime shows each screen.
Which code TallyPrime uses: the lookup order
When the same detail is set in more than one place, TallyPrime follows a lookup order defined in the company:
- Ledger first (default): Ledger, then its Group, then Stock Item, Stock Group, and finally Company.
- Stock item first: Stock Item, then Stock Group, then Ledger, Group and Company.
Change it under F11 (Features) in the company's GST rate and other details, in the additional configurations. Traders with many items usually prefer the stock-item-first order, because the HSN belongs to the item, not to the sales ledger.
A practical setup for traders and service businesses
- Traders: set HSN and rate on stock groups where every item in the group shares them, and on individual stock items where they differ. Use the stock-item-first lookup order.
- Service businesses: set SAC on the service income ledgers, with the default ledger-first order.
- Check a sample invoice of each type and confirm the code printed is the one you expect.
- Review before GSTR-1 for items with missing or short codes.
Common HSN problems
- Code set on the ledger overrides the item. With the default order, a code on the sales ledger wins. Clear it or change the lookup order.
- New items created without HSN. Restrict who creates stock items, or review new items weekly.
- Wrong rate with the right code. The rate and the code are set together, so check both.
GST details also matter for advances on services, covered in our guide to customer advances in Tally. For GSTR-2B matching inside Tally, see our Tally GST integration page.
Frequently asked questions
Where do I enter the HSN code in TallyPrime?
You can set HSN or SAC details in the company, a ledger group, a ledger, a stock group or a stock item. Choose "Specify Details Here" in the master to enter them directly, or "As per Company/Group" to inherit them.
How many HSN digits do I need in GSTR-1?
Based on aggregate annual turnover in the previous financial year: at least 4 digits if it was up to Rs 5 crore, and 6 digits if it was above Rs 5 crore, in the HSN summary (Table 12) of GSTR-1.
Which HSN code does TallyPrime use if it is set in several places?
TallyPrime follows the lookup order set in the company GST details (F11). By default it checks the ledger first, then its group, the stock item, the stock group and finally the company. You can switch to a stock-item-first order.