Harmonized System of Nomenclature (HSN) codes and Service Accounting Codes (SAC) are globally accepted techniques for naming and classifying goods and services. HSN codes and SAC are widely used in GST to identify goods and services. With effect from 1st April 2021, it is mandatory to mention the HSN code and SAC of the supply in tax invoices and furnish the same in GSTR-1. Hence, an efficient way of finding code and product descriptions was required for taxpayers.
The Goods and Services Tax Network (GSTN) has enhanced the āSearch HSNā functionality on the GST portal. This aims to mitigate the challenges taxpayers face in finding HSN codes, including SAC and the related descriptions. It also links e-invoicing and artificial intelligence tools to provide easy search and application of HSN codes.
The Search HSN function helps the taxpayers search the HSN code to find the technical description provided in the HSN descriptions and trade descriptions commonly used by businesses. HSN codes can be searched by giving the code itself or partial descriptions of the goods or services. This option is available before login and after login. One can navigate the functionality by going to Home >> Services >> User Services >> Search HSN.
The Search HSN option was initially available to taxpayers to help search the HSN code for goods/services and their Technical Description, i.e., HSN descriptions per the Customs Tariff Act. However, differences between Technical Descriptions and descriptions of the supply commonly used in trade made it difficult for the taxpayers to find the correct HSN codes.
The enhanced Search HSN functionality has new changes to mitigate the differences between the Technical Descriptions and commonly used trade descriptions. This will help taxpayers search for HSN codes with ease and provide detailed information regarding the same.