HSN and SAC Codes under GST

HSN (Harmonised System of Nomenclature) codes classify goods, and SAC (Service Accounting Codes) classify services. Both appear on GST invoices and in returns, and they decide which tax rate applies to what you sell. Every business registering for GST should know the code for its product or service.

Why codes matter for your business

The code ties your product to a GST rate and keeps classification uniform across India. A wrong code can mean wrong tax, buyer credit problems or a notice. Once you complete GST registration, picking the right code becomes part of every invoice you raise.

Where HSN and SAC are required

• On tax invoices for goods (HSN) and services (SAC).
• In the HSN summary table (Table 12) of GSTR-1.
• In e-invoicing data, where the code is part of each line item.
• In e-way bill details when moving goods.

How many digits do you need?

As per GST portal advisories, taxpayers with annual aggregate turnover up to Rs. 5 crore report 4-digit codes, and those above Rs. 5 crore report 6-digit codes. From May 2025, the GSTR-1 table accepts HSN only by selection from a drop-down list, so manual typing is no longer allowed. A government release on invoicing also explains that SAC is simply the service equivalent of HSN. Rules and notifications change, so confirm the current requirement on the portal before you file.

How to find the right code

Search the HSN directory on the GST portal, or check the Customs Tariff for goods. Match the code against the notified rate schedule. If your product is mixed or unusual, get advice from a specialist in GST advisory before locking in a code in your billing software.

Common mistakes

• Using a code from a competitor’s invoice without checking your own product.
• Entering fewer digits than required for your turnover.
• Mixing HSN with SAC, for example using a goods code for a service.
• Never updating codes in billing software after rate or tariff changes.

Related guides: GSTR-1 and GSTR-3B, Input Tax Credit, What is GSTIN

FAQs

What is the difference between HSN and SAC?

HSN is for goods. SAC is for services. Both are numeric codes used on invoices and returns.

How many digits of HSN must I report?

Per portal advisories, 4 digits up to Rs. 5 crore turnover and 6 digits above it. Check the portal for any later change.

Can a wrong HSN code attract a notice?

It can, because it may change the rate or mismatch with your buyer’s data. Fix it early.

Unsure about your product’s code or rate? Talk to a Taxhint expert.