HSN/SAC & GST Rate Hierarchy in TallyPrime
TallyPrime provides the flexibility to set up GST Rates and HSN/SAC details in different masters. In addition, it enables you to specify where to look for the details by setting up the tax rate hierarchy and HSN/SAC hierarchy in the Company.
There are different places in TallyPrime where you can define the GST rate and HSN/SAC details:
- Ledger (sales/purchase)
- Ledger Group
- Stock Item
- Stock Group
- Company level
Source of GST in TallyPrime
You can choose the order from one of the following based on which TallyPrime checks these masters for the GST rate and HSN/SAC details.
For example,
- If the hierarchy is set to Ledger → Group → Stock Item → Stock Group → Company
TallyPrime first checks the ledger for the details. If not found there, it will move to the Group, then Stock Item, and so on.
- If the hierarchy is set to Stock Item → Stock Group → Ledger → Group → Company
TallyPrime checks for the details in the Stock Item first, then Stock Group, then Ledger, and so on as per the flow.
The Ledger hierarchy is the default option. You can change it from:
F11 (Company Features) > Set/Alter Company GST Rate and other details > Additional Configurations, select the source of GST Rate & HSN/SAC.
GST Hierarchy in TallyPrime
The following example considers managing tax rate hierarchy. The same explanation is true for even HSN/SAC details.
Let’s say your business sells 10 different products/stock items:
- 8 of the items have 5% GST Rate.
- 2 of the items have 12% GST Rate.
As most of your products fall under 5% GST rate, you can set the GST rate as 5% at the company level. This means by default all products will be taxed at 5%.
To handle the remaining 2 products with 12% GST rate, you can:
- Set the GST rate in the respective stock items.
- Alternatively, create a stock group for them, and set the rate in the stock group.
Assuming the source for GST Rate in TallyPrime is set as Ledger, record your sales invoices.
Now, while recording the invoices, TallyPrime will look for the rates as per the ledger hierarchy: Ledger → Group → Stock Item → Stock Group → Company.
- For the 8 items, TallyPrime will consider 5% from the company level.
- For the 2 items, TallyPrime will use 12% from the stock items/stock group, since it overrides the rate defined at the company level.
If you want to further control and track all sales based on GST rate-wise, you do not need to make any changes to the existing rate setup. Instead, you can:
- Create two sales ledgers and set GST rate as 5% and 12% respectively – for example, Sales@5% and Sales@12%.
- Record your invoices. Use Sales@5% for items with 5% GST Rate and Sales@12% for items with 12% GST Rate.
TallyPrime will follow the default hierarchy starting with Ledger > Group > Stock Item > Stock Group > Company. It will pick the rate up from the Ledger for computing the Tax Amount without looking for the details in any other masters.
Now consider, as per the GST Council meeting, the GST Rate for the 2 stock items has changed from 12% to 18%. Therefore, you updated the GST Rate in the respective stock items or the stock group to 18%, with the effective date as, for example, 23-Sep-2025. Note that the ledger has 12% defined already.
In this case, since the source hierarchy is set to Ledger, TallyPrime will not pick up the updated Tax Rate from the stock item when you record a transaction.
However, you do not need to change the rates defined in the ledger. Simply change the source of the GST Rate.
- F11 (Company Features) > Set/Alter Company GST Rate and Other Details > Source of GST Rates in transactions as Stock Item.
Next time you record your invoice on 23-Sep-2025 or any later date for the 2 stock items with 18% GST Rate, TallyPrime will pick up the rate defined in the Stock Item/Stock Group first, ignoring the earlier 12% rate in the sales ledger.
Updating the GST Rates in TallyPrime is just a few simple steps. Ensure to set the rate appropriately and specify the source of tax rate, as convenient.
Refer to: Set Up GST Details in TallyPrime | Set Up GST Rate and HSN/SAC Details | GST Rate Setup Report
