¶ Purpose
The purpose of GST-HSN (Harmonized System of Nomenclature) in an ERP system is to classify goods and services under the correct HSN/SAC code to ensure accurate GST rate determination and statutory compliance. It enables the system to automatically calculate GST, display mandatory HSN/SAC details on invoices, and generate HSN-wise GST reports for return filing. GST-HSN helps prevent tax errors, supports audit traceability, and ensures compliance across purchase, sales, and service transactions.
¶ Prerequisites
- Access rights must be assigned to the user responsible for adding, editing and deleting the GST HSN Number details.
¶ Add GST HSN Details
The GST HSNNO Masters – Mode: New screen allows the user to add GST HSN details.
Navigation: Main Menu → Masters → Masters – GST → GST -HSNNO → Add
- The user can search for details based on the HSN / SAC Number.
- Click Add, the following screen appears.
- The GST-HSNNO Master – Mode: New screen allows the user to enter the HSN details such as the HSN/SAC Number, HSN/ SAC Name, HSN/ SAC Category and HSN/SAC Description.
- The user must select the HSN/ SAC Type from the dropdown list.
- The table below describes the different HSN / SAC types and their usage.
| Sl. No. | HSN / SAC Type | Purpose | When to Use |
|---|---|---|---|
| 1. | Regular | For physical goods/items. | Used for raw materials, finished goods, consumables, spare parts, etc. |
| 2. | Service | For service-related transactions. | Used for maintenance, consulting, installation, AMC, and other services. |
- Click Save, to save the added details.
- Click Close, the added details will appear on the left panel of the screen.
¶ Edit or Delete GST HSN Details
The GST-HSNNO Master – Mode: Edit screen allows the user to edit or delete the added or existing GST - HSN number details if required.
Navigation: Main Menu → Masters → Masters – GST → GST- HSNNO → Select the GST-HSNNO → Edit
- The user can search for particular details based on the HSN / SAC Number.
- The user must select the appropriate HSN / SAC Number from the left panel of the screen.
- Click Edit, and the following screen will appear.
- The GST-HSNNO Master – Mode: Edit screen allows the user to edit details such as the HSN/SAC Number, HSN/ SAC Name, HSN/ SAC Category, HSN/SAC Description and HSN/ SAC Type.
- Click Save to save the edited details.
- Click Delete, and the following message appears.
- Click Yes.
- Click Close, and the deleted details will disappear from the left panel of the screen.
Note: The user can delete the added or existing GST - HSN Number details only if they are not linked to any master's and has not been used in any transactions.
¶ View Details in Tree or Grid
The Grid View and Tree View options allow the user to view GST-HSN details either in a tabular format or in a hierarchical structure for easier navigation and understanding.
- Click Grid View to view details in tabular format (rows and columns), as shown below.
- Click Tree View to display data hierarchically (parent-child structure), as shown below.
- The user can expand or collapse nested items to view relationships, categories or subcategories.
¶ Search GST HSN Details
The Search option allows the user to search for details based on the HSN/SAC Number, HSN/ SAC Name, HSN/ SAC Category, HSN/SAC Description and HSN/ SAC Type.
- Click Search, and the screen will appear as shown below.
- The user must select the appropriate Filter On and Filter Text from the dropdown list.
- The user must enter the corresponding filter value and press Enter key.
- Once the user presses Enter key, the corresponding list will appear on the left panel of the screen.
¶ Print GST HSN Details
The Print option allows the user to print the added or existing GST HSN details.
- Click Print, the following screen will appear.
- Click Filter, to search for details.
- Click Sort, to arrange details in either ascending or descending order.
- Click Export to Excel, to view details in Excel.
- Click Print, to print details.
- Click Print Preview, to view details before printing.
- Click Close to navigate to the GST HSN screen.
¶ Bulk Update - Edit Multiple Details
The Bulk Update option allows the user to edit multiple GST-HSN details at once.
- Click Bulk Update, and the following screen will appear.
- The user can edit details such as the HSN/SAC Number, HSN/ SAC Name, HSN/ SAC Category, HSN/SAC Description and HSN Type.
- Click Save, and the edited details are updated.
¶ Functional Use Cases
| Sl. No. | Use Case | Business Scenario | Functional Outcome in ERP |
|---|---|---|---|
| 1 | Create HSN Code | The organisation deals in taxable goods or services. | ERP allows creation of HSN/SAC codes with tax details. |
| 2 | Assign HSN to Goods | Goods must be classified correctly for GST. | ERP allows the linking of goods items to the appropriate HSN codes. |
| 3 | Assign HSN to Services | Services require SAC/HSN classification for GST. | ERP links services to correct SAC/HSN codes. |
| 4 | Define GST Rates for HSN | GST rates vary based on HSN/SAC classification. | ERP applies correct GST rates during transactions. |
| 5 | Update HSN Details | HSN codes or GST rates are revised by authorities. | ERP allows the user to update the HSN configuration for future use. |
| 6 | Validate HSN During Transaction | Incorrect or missing HSN causes non-compliance. | ERP validates HSN presence before transaction posting. |
| 7 | Auto GST Calculation | GST must be calculated accurately. | ERP auto-calculates GST using mapped HSN/SAC. |
| 8 | GST Invoice Compliance | HSN/SAC details are mandatory on invoices. | ERP prints HSN/SAC on GST-compliant invoices. |
| 9 | GST Reporting & Returns | HSN-wise data is required for GST filings. | ERP generates HSN/SAC-wise GST reports. |
| 10 | Audit & Traceability | Tax classification must be auditable. | ERP maintains audit trail for HSN usage and changes. |
¶ Use Case Scenario
- Click here for a detailed use case scenario.
¶ Transaction Checklist
| Steps | Checklist Item | Details / Purpose |
|---|---|---|
| 1 | Identify Item Type | Confirm whether the record is for goods (HSN) or services (SAC). |
| 2 | Verify HSN/SAC Code | Ensure the correct and latest HSN/SAC code is selected as per GST rules. |
| 3 | Validate Description | Confirm the HSN/SAC description matches the nature of goods or services. |
| 4 | Check GST Applicability | Verify whether GST is applicable, exempt, or nil rated. |
| 5 | Verify GST Rates | Confirm CGST, SGST, IGST, and Cess rates are correctly defined. |
| 6 | Validate Effective Date | Ensure GST rates and HSN/SAC details are effective from the correct date. |
| 7 | Map to Item/Service Master | Ensure HSN/SAC is properly assigned in the item master. |
| 8 | Review Existing Mapping | Check for duplicate or incorrect HSN/SAC assignments. |
| 9 | Confirm Invoice Requirement | Verify the required HSN digit length based on turnover limits. |
| 10 | Assess Transaction Impact | Review how the HSN/SAC affects tax calculation and pricing. |
| 11 | Authorization & Approval | Obtain approval for new or updated HSN/SAC setup. |
| 12 | Compliance & Audit Review | Ensure configuration meets GST compliance and audit requirements. |