Before we jump into the details you must have some basic understanding of HSN code. HSN code stands for Harmonized System of Nomenclature code. This code made by the General Agreement on Tariffs and Trade (GATT). This is an international product coding system. But there is a catch; the code is kind of depending on the turnover of the company. I will tell you how to put the code for what kind of turnover. Here it is.

  • Company turnover is less than 1.5 core, you do not need to put any code.
  • Company turnover is between 1.5 to 5 cores, you have to put the first two digit of the code.
  • Company turnover more than 5 cores, you have to put the first four digit.
  • If you are the import-export company you have to put the eight-digit code, turnover is not a matter in this case.

When you entry HSN in Tally, you must remember that you can entry HSN in four different level. I will discuss it in details here.

Company level

All your goods have the same HSN number than you can put it in company level. Let me give you an example. Think you have a garments factory and the only thing you produce is denim jeans product. So this product has the same HSN number for the entire product so you can put the HSN at the company level. And how do you put HSN in company level? Follow the lead,

Go to company features, select Statutory & Taxation, next move is you go to the Set/alter GST details, at the last press enter and now you will see the place where to HSN.

Stock level

If your company produce a lot of things and the different product needs different HSN than you will add HSN at stock level. You can configure this doing the following steps. First, you have to go to the Inventory Information, select Stock Groups after that, you have to create the group, now set alter GST details and Enter Yes, at the last click on Tax rate history button on the right side. Enter HSN Code there.

Stock Item Level

Now come to the stock item level, why do you need this? Well, sometimes the product under the category has a different price. For this reason, you might need to give HSN for the different product. Let me understand you with an example, you own a garment shop, under male child stock you have jeans, leather jackets, t-shirt etc. The jeans and t-shirt fall under the same HSN code but the; either product falls under a different HNS code.

You may ask how to How to perform this? Here is how, go to the Inventory Information, from there move to Stock Item, create the stock item, set or alter GST details and press yes, after that click Tax rate history button on the right side and at the very last enter HSN code.

Ledger Group Level

Sometimes, we feel the need of use of same HSN for different transactions. Well, that is also possible if you create the HSN at ledger level. You can configure this by following steps, first go to the  Accounts Information, from their select the Groups, now create sales, from there, create sales group, after that you select the ledger group that you intend to set up HSN code, now set alter GST details ,  press Yes  and enter HSN code.

See it’s not a huge workload if you know what to do. But, there can be more inquiries from you and if you have any question regarding this you feel free to ask in the comments section Or contact us. RIR Software Solution allows trying to give you a better solution.