Since the concept of overseas sailing came into the picture, many exports and imports take place within the countries. Within this transactional system, various products are being transacted all over the world irrespective of having different language barriers. Hence know the concept of HSN codes which are regarded as an integral part of international trade, nowadays.
Along with that, it has been observed that during the import of goods and services, various taxes are levied on the products. Even when the products get into the market, again the sales tax gets levied on it. Overall, it gave rise to a double taxation system. In order to avoid such circumstances, the Government has introduced the GST system in India. SAC or Service Accounting Code and HSN code, both are used under the regime of GST.
Description of SAC Code and HSN code
While discussing, we came across two types of concepts, SAC code, and HSN code. Before any further discussion, let me know about the SAC code and HSN code.
- HSN code: In order to classify the goods all over the world, the World Customs Organization or WCO introduced a new concept of Harmonized System of Nomenclature or HSN code. It is a six-digit number provided by World Customs Organization, in order to classify the products all over the world. These numbers defined certain sets of rules and regulations related to the taxation system which are levied on certain products. Such HSN often helps the custom authority to identify the types of products and other product details. These HSN numbers also generate information that helps the traders to track the movement of products around the world. The custom authority also used such HSN code to find out the quantum of the goods that are imported and exported out of a particular country.
The HSN code that is provided by the World Customs Organization or WCO, is accepted worldwide. Such a coding system is adopted by more than two hundred countries in the world. The experts believe that it is one of the best systems of logic that help to classify as well as identify the products that are introduced in the international trade market.
- SAC code: SAC code or Service Accounting Code are the codes that are developed by the Central Board of Excise and Customs (CBEC) of India, which is generally used to categorize the various services under the GST (Goods and Service Tax). It is generally used to classify the different services, which is similar to the HSN code. Normally the traders often used to gain the SAC code of their services with the help of the SAC code Finder.
Difference between SAC code and HSN Code
Both the SAC code ad HSN code is the coding system which is used for tax determination, on the products that are transacted during export and import.
Though both the SAC and HSN code are used for tax determination under GST in India, yet it has certain slight difference between them. Under the regime of GST or Goods and Service tax, In India, the goods and services are classified into two. They are HSN code or Harmonized System of Nomenclature and SAC or Service Accounting Code.
First, The SAC codes are issued by the CBEC, whereas the HSN code is issued by WCO.
Secondly, the HSN code deals with the taxation system related to Goods or products, whereas, the SAC related to Services.
How to access the SAC code finder?
In order to get the SAC code, one needs to follow the given procedures.
First, log in to SAC code finder like legal docs.co.in and visit the HSN page search.
Second, there, a dialogue box will appear where you need to choose an option, here you will choose services.
Third, mention the category on which you need the SAC code.
Fourth, after mentioning, you will get the SAC code on a list defined on the given page.
Importance of SAC code and HSN code
In India, both the SAC code and HSN code are quite important for the international trading system. Along with that both the SAC code and HSN code are used in the taxation system of India, related to goods and services. Well, let’s first know the importance of both one by one.
- HSN code: Though the primary function of this HSN code is to classify the various goods which are accepted worldwide. Yet, it can also be helpful for gathering all certain data which often used to solve various problems related to the import and export system. Other than these, some additional benefits that are provided by the HSN code are as follows:
- The HSN code often helps to collect information including statistical data on international trade.
- The custom authority gains the provision on the basis of rationality for the customs tariffs regarding the international trading system.
- The HSN code is a unique and uniform numerical value levied on each and every product which is often accepted by countries all over the world.
- During the import and export of products, this HSN code provides information about the products and also help in the taxation system,
- SAC codes: In India, the SAC code or Service accounting code generally related to the services. While introduction of Goods and service tax, the HSN code is used for classifying products, whereas the SAC codes are used to classify the service tax. In case of the taxation system, these SAC code holds prime importance. it is believed that with the help of SAC codes, problems like the double taxation system can be overcome, though GST was introduced to deal with the problem related to the tax.
The SAC codes hold prime importance for international trade as well as domestic business. While filling the GSTR form, one needs to use this SAC code.
Hence, from the above discussion, we can conclude that the SAC code and HSN code, both are important for private traders as well as the government of a country. It can be said that having a common structure of SAC code and HSN code, often enables the countries to initiate the collaboration on the basis of buying and selling of various products. It also helps the customs authority to levy proper tax rates on the products that in turn helps to file the GST return more easily and at an accurate rate.