Order: HSN Code & Tax Rate Are Applied for Goods in TallyPrime

TallyPrime follows a structured hierarchy to determine the HSN Code and GST Rate applicable to goods.

If GST details are specified at multiple levels, TallyPrime prioritizes the most specific level first.

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1. Hierarchy of HSN Code & GST Rate Application in TallyPrime

The order in which HSN Code and GST Rate are applied to goods in TallyPrime is as follows:

1. Stock Item Level (Highest Priority)
2. Stock Group Level
3. Accounting Group Level
4. GST Classification (If Used)
5. Sales/Purchase Ledger Level
6. Company GST Configuration (Lowest Priority)

If GST details are not specified at one level, TallyPrime moves to the next level in the hierarchy.

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2. Detailed Explanation of Hierarchy of HSN Code & GST Rate with Examples in TallyPrime

A. Stock Item Level (Highest Priority)

The HSN Code and GST Rate set at the Stock Item level take priority over other levels.

Steps to Apply HSN Code & GST Rate in Stock Item:

1. Gateway of Tally > Create / Alter > Stock Item
2. Select the item and enable GST Applicable? → Yes
3. Enter:
   • HSN Code
   • GST Rate

Example:

• Stock Item: Dell Laptop
• HSN Code: 8471
• GST Rate: 18%

If an invoice contains this Dell Laptop, TallyPrime will apply HSN: 8471 and 18% GST, even if different rates exist at other levels.

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B. Stock Group Level

If HSN Code & GST Rate are not set at the Stock Item level, TallyPrime checks the Stock Group level.

Steps to Apply HSN Code & GST Rate in Stock Group:

1. Gateway of Tally > Create / Alter > Stock Group
2. Enable Set/Alter GST Details? → Yes
3. Enter:
   • HSN Code
   • GST Rate

Example:

• Stock Group: Laptops & Computers
• HSN Code: 8471
• GST Rate: 18%

If Stock Items in this group do not have specific GST details, then HSN: 8471 and 18% GST will be applied.

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C. Accounting Group Level

If HSN and GST rate are missing in both Stock Item and Stock Group, TallyPrime will check the Accounting Group of the transaction.

Steps to Apply HSN Code & GST Rate in Accounting Group:

1. Gateway of Tally > Create / Alter > Accounting Group
2. Enable Set/Alter GST Details? → Yes
3. Enter:
   • HSN Code
   • GST Rate

Example:

• Accounting Group: Electronics Sales
• HSN Code: 8528
• GST Rate: 18%

If GST details are not set in Stock Item or Stock Group, then HSN: 8528 and 18% GST will apply.

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D. GST Classification (If Used)

If GST Classifications are enabled and linked to transactions, they override lower levels.

Example:

• GST Classification: Works Contract
• HSN Code: 9954
• GST Rate: 12%

If this classification is applied, TallyPrime will use HSN: 9954 and 12% GST, even if Stock Item, Stock Group, or Accounting Group have different values.

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E. Sales/Purchase Ledger Level

If GST details are not available at Stock Item, Stock Group, or Accounting Group levels, TallyPrime checks the Ledger used in the transaction.

Steps to Apply HSN Code & GST Rate in Ledgers:

1. Gateway of Tally > Create / Alter > Ledger
2. Enable GST Applicable? → Yes
3. Enter:
   • HSN Code
   • GST Rate

Example:

• Ledger: Sales – GST 18%
• HSN Code: 9999
• GST Rate: 18%

If no other levels provide GST details, HSN: 9999 and 18% GST will be applied from this ledger.

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F. Company GST Configuration (Lowest Priority)

If HSN Code and GST Rate are not set anywhere, TallyPrime will use default company-level GST details.

Steps to Set Default GST in Company:

1. Gateway of Tally > F11 (Features) > GST Configuration
2. Enable GST Applicable? → Yes
3. Enter Default HSN Code & GST Rate

This is used only if GST is not specified anywhere else in the hierarchy.

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3. Hierarchy of GST Rate & HSN Code Application in TallyPrime – Summary

Level	HSN & GST Rate Applied If Set?	Example
Stock Item (Highest Priority)	Yes	Dell Laptop (HSN: 8471, GST: 18%)
Stock Group	If not set in Stock Item	Mobile Phones (HSN: 8517, GST: 12%)
Accounting Group	If not set in Stock Item/Group	Electronics Sales (HSN: 8528, GST: 18%)
GST Classification	Overrides other levels if used	Works Contract (HSN: 9954, GST: 12%)
Sales/Purchase Ledger	If not set anywhere above	Sales – GST 18% (HSN: 9999, GST: 18%)
Company GST Configuration (Lowest Priority)	Only if nowhere else defined	Default HSN & GST for all items

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4. Practical Example – Applying HSN & GST Rate in an Invoice in TallyPrime

Scenario:

• Stock Item: Samsung Galaxy S21
• Stock Group: Mobile Phones (HSN: 8517, GST: 12%)
• Accounting Group: Electronics Sales (HSN: 8528, GST: 18%)
• Ledger Used: Sales – GST 18% (HSN: 9999, GST: 18%)

Which HSN & GST Rate Will Be Applied?
Since Stock Item details are not set, TallyPrime will apply HSN: 8517 and 12% GST from the Stock Group level.

If Stock Item details were missing, it would move to Stock Group, then Accounting Group, then Ledger, and finally Company GST settings.

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5. Conclusion

Understanding the hierarchy of HSN Code and GST Rate application in TallyPrime ensures accurate GST calculations and compliance.

Setting GST details at the Stock Item level is ideal, but if missing, TallyPrime follows a structured approach to apply the correct tax rate.