HSN & SAC codes for GST invoices
Every taxable line on an Indian invoice needs a classification: HSN for goods, SAC for services. The number of digits depends on your turnover, the code drives the GST rate, and a wrong code can break input tax credit for your customer. Here's the full picture.
HSN vs SAC — what each is
HSN (Harmonized System of Nomenclature) is the international standard for classifying traded goods, maintained by the World Customs Organization and used by 200+ countries. India adopted HSN under GST and extended it to 8 digits for fine-grained classification.
SAC(Services Accounting Code) is India's code system for services, drawn from the UN Central Product Classification. Every service supplied under GST falls into a SAC chapter beginning with the prefix '99'.
A composite supply (one indivisible bundle of goods and services) takes the code of the principal supply. A mixed supply (separable goods and services billed together) is taxed at the highest rate among its components and uses that component's code.
Digit requirements by turnover (current rule)
From 1 April 2021, Notification 78/2020 – Central Tax sets the minimum number of digits to print:
| Aggregate turnover (previous FY) | B2B invoices | B2C invoices |
|---|---|---|
| Up to ₹5 crore | 4 digits (mandatory) | Optional |
| Above ₹5 crore | 6 digits (mandatory) | 6 digits (mandatory) |
| Notified chemicals; exports/imports | 8 digits (regardless of turnover) | |
Composition dealers follow the same digit count on a Bill of Supply. E-invoice and e-way bill schemas accept the same code; the IRP and EWB portal validate the code exists in the master.
Reading an HSN code
An 8-digit HSN code is hierarchical. Example: 3004 90 99 (medicaments, other):
- 30 · Chapter — Pharmaceutical products
- 3004 · Heading — Medicaments (excluding goods of heading 3002, 3005 or 3006), packaged for retail sale
- 3004 90 · Sub-heading — Other
- 3004 90 99 · Tariff item — All other items in that sub-heading
The first 6 digits are common with the international HSN. India's 7th and 8th digits add the national tariff line. SAC codes start with '99' and follow a similar four-level structure (chapter/heading/group/service code).
Common goods / services examples
| Item / Service | Code | Indicative GST |
|---|---|---|
| Software (license, packaged) | 8523 80 20 | 18% |
| IT software services (development, customization) | 9983 13 | 18% |
| Mobile phones | 8517 13 | 18% |
| Restaurant service (non-AC, standalone) | 9963 11 | 5% (no ITC) |
| Goods Transport Agency (GTA), forward charge | 9965 11 | 12% with ITC / 5% RCM |
| Hotel accommodation, tariff up to ₹7,500 | 9963 31 | 12% |
| Hotel accommodation, tariff above ₹7,500 | 9963 31 | 18% |
| Legal services from advocate | 9982 12 | 18% (RCM) |
| Cement | 2523 29 | 28% |
| Books, printed | 4901 | 0% (exempt) |
Indicative only. Always verify the current rate notification on cbic-gst.gov.in before relying on a rate. HelloBooks updates its masters when CBIC publishes notifications.
How HelloBooks does this
HelloBooks ships a CBIC HSN/SAC master with chapter descriptions, current GST rates, and search by name or code. Tag once at the item level and every invoice line is right.
- 1
Open the item master
Go to Inventory → Items (for goods) or Services for services. Click 'New' to create or edit an item.
- 2
Search the HSN or SAC code
Type the item name or a keyword in the HSN/SAC field. HelloBooks suggests matches from the CBIC master with the chapter description and applicable GST rate.
- 3
Select the matching code
Pick the code that best describes the item. The default GST rate for that code populates automatically; override only if the rate notification specifies a different one for your variant.
- 4
Save the item
Save. From now on every invoice line picking this item carries the HSN/SAC code, the rate, and the right CGST/SGST or IGST split based on the place of supply.
- 5
Verify on the invoice
When you print or download a tax invoice, the HSN/SAC column shows the correct digit-count for your turnover bracket. The e-invoice JSON sends the same code to the IRP.
Frequently asked questions
What is the difference between HSN and SAC codes?
HSN (Harmonized System of Nomenclature) is a global classification system for goods, developed by the World Customs Organization. India adopted HSN with extensions for GST. SAC (Services Accounting Code) is an India-specific classification for services, drawn from the United Nations Central Product Classification. Goods → HSN. Services → SAC. A composite supply uses the principal supply's code.
How many digits of HSN/SAC must I print on an invoice?
Per Notification No. 78/2020 – Central Tax (effective 1 April 2021): aggregate annual turnover up to ₹5 crore — 4 digits on B2B invoices, optional on B2C. Above ₹5 crore — 6 digits on all invoices (B2B and B2C). 8-digit HSN is required for notified chemicals (Notification 90/2020) and for export and import invoices regardless of turnover.
Which turnover do I look at — current or previous year?
The previous financial year's aggregate turnover. If your FY 2024-25 turnover crossed ₹5 crore, you must print 6-digit HSN on every invoice from 1 April 2025 onwards.
Where do I find the official HSN list?
The CBIC publishes the Customs Tariff with chapter-wise HSN codes (cbic-gst.gov.in). The GST portal also offers a searchable HSN lookup under Services → User Services → Search HSN/SAC. SAC codes are published in the Scheme of Classification of Services notification.
What if I pick the wrong HSN code?
Wrong HSN can mean wrong rate, which means short-payment of GST and interest on the difference. It can also lead to ITC denial for the customer if the mismatch shows up in GSTR-2B reconciliation. Penalties up to ₹50,000 (₹25,000 each under CGST and SGST) can apply for repeated misclassification.
Does HelloBooks suggest HSN/SAC codes automatically?
Yes. When you create an item, HelloBooks suggests HSN/SAC codes based on the item name, description, and category, drawn from the CBIC master. You can search by code, by chapter, or by keyword. Once an item is tagged, every future invoice line uses the saved code without re-entry.
Do composition dealers need to print HSN/SAC?
Composition dealers issue a Bill of Supply (not a tax invoice) and the same digit-count rules apply: 4 digits up to ₹5 crore turnover, 6 digits above. The 'Composition Taxable Person, not eligible to collect tax on supplies' declaration must also appear on the document.
Are HSN codes the same as those on the e-invoice schema?
Yes. The e-invoice schema (Form GST INV-01) accepts the same HSN/SAC code on each line. The IRP validates that the code exists in the master and that the rate is consistent. Mismatches reject the IRN.
More on India compliance
Indian GST: CGST, SGST, IGST & Registration
Thresholds, GSTIN format, place of supply, and the rules that decide whether you charge CGST + SGST or IGST.
Read gst basicsGST E-Invoicing: IRN, QR & IRP Workflow
Turnover thresholds, the IRN/QR lifecycle, the 24-hour cancellation window, and how HelloBooks pushes invoices to the IRP.
Read e-invoicingE-Way Bill Rules, Distance Limits & Cancellation
When an EWB is required, validity periods by distance, Part A vs Part B fields, and the HelloBooks generation flow.
Read e-way billGSTR-1, 3B, 2B & 9 Returns: Filing Guide
What each return covers, the due dates and late fees, and how HelloBooks builds them from your books.
Read gstr returnsAuthoritative sources
GST rules change frequently. Always verify the current position with the official GSTN sources below before filing.
- GST Portal — gst.gov.inOfficial GSTN portal for registration, returns, and payments.
- CBIC GST — cbic-gst.gov.inCentral Board of Indirect Taxes & Customs — Acts, rules, notifications, and circulars.
- E-Invoice Portal — einvoice1.gst.gov.inInvoice Registration Portal (IRP) for IRN generation and e-invoice schema.
- E-Way Bill Portal — ewaybillgst.gov.inNational e-way bill portal for EWB generation, cancellation, and verification.
Run all of this on autopilot in HelloBooks
Indian GST, e-invoicing, e-way bills, and GSTR returns are built into the free plan. No add-on, no per-invoice charge.