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GST Tax Rate Not Picking New SAC Codes Rates When “HSN = Blank” Record Exists

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Posted on by Saalim Ansari

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Hello Experts,

We are facing an issue in Dynamics 365 Finance during GST calculation in the Vendor Invoice Journal (LedgerJournalTransVendInvoice). Newly created SAC/HSN codes are not picked during tax rate lookup. Instead, the system always selects the rate from a generic “HSN Code = Blank” record (Rate = 12%).

What’s happening

Older SAC/HSN codes work correctly even when a “HSN = Blank” row exists.
Only newly added SAC/HSN codes fall back to the blank-HSN record.
If we delete the “HSN = blank” row, the new SAC code rate is picked correctly.

Tests done

Created a new SAC code (blank) + a new HSN code to test. → System still selects the HSN blank (12%) rate instead of the new code’s rate.
No customizations on HSN/SAC or GST Tax Rate forms.
Issue consistently occurs during tax calculation on Vendor Invoice Journal.
Clearing cache, rebuilding parameters, and validating date ranges did not resolve it.

Questions

Why do older SAC/HSN codes resolve correctly, but newly created ones always fall back to the blank-HSN record?
Does the GST lookup assign different precedence to newly added codes until some cache or sync happens?
Is this expected behavior of the GST tax rate matching logic, or a potential issue?
Is there any Microsoft documentation explaining how fallback rules (like blank-HSN) affect new codes?
Any recommended steps such as cache refresh, table cleanup, or reinitialization of GST configuration?

Any help or guidance from the community would be appreciated.

Categories:

Dynamics 365 Finance

Microsoft Dynamics AX

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Sathish Kumar Palan... 388 Super User 2026 Season 1 on at

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Hi

This issue is likely caused by how the GST tax rate lookup prioritizes fallback records when multiple matching conditions exist. In Dynamics 365 Finance, if a “HSN = blank” record exists, it may override newly created HSN/SAC codes unless the system recognizes the new codes as valid master data.

Validate Tax Setup

Go to Tax > Setup > Sales tax > India > Rate

Use “Show Duplicates” to identify conflicting records.

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Saalim Ansari 689 on at

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Hello @Sathish Kumar Palanisamy,

Thanks for the response.

I am adding more details and screenshots to show the complete process and where the issue appears.

1. GST Tax Rate Setup

We have a generic record with:

Consumption State = Not blank

HSN Code = Blank

Rate = 12%

Additionally, we have specific SAC-based records:

SAC = 996412 → 5%

SAC = 9964 → 18%

(See screenshots 1 & 2)

2. Vendor Invoice Journal Process (LedgerJournalTransVendInvoice)

In the Vendor Invoice Journal:

We select the vendor, tax information, and SAC code (example: 9964).

No HSN code is selected, only SAC.

(See screenshot 3)

3. Issue

During tax calculation, the system still picks 12% from the HSN = blank rule instead of the SAC-specific rate.

(See screenshot 4)

Thanks again for looking into this.

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Sathish Kumar Palan... 388 Super User 2026 Season 1 on at

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Hi

For Blank HSN / SAC , please define the transaction date to with completed date and try the transaction with current date.

If you use the blank HSN / SAC with extended date in transaction date to , by default tax document picks and calculates from extended date.

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