HSN (Harmonized System of Nomenclature) is an international system for classifying goods. SAC (Services Accounting Code) does the same job for services. On a GST invoice, the code you put against each line decides the applicable GST rate.
This guide explains how the codes work and how to pick the correct one.
HSN vs SAC
- HSN codes classify goods (e.g. 8517 for smartphones).
- SAC codes classify services (e.g. 998314 for IT design services).
- Both are commonly searched together as 'HSN code'.
How many digits do you need?
The number of HSN digits required on an invoice depends on your turnover band. Smaller businesses may report 4-digit HSN, while higher turnovers report 6 digits, and exports/imports use 8-digit codes.
Always check the current threshold notified for your turnover before deciding the number of digits.
How to find the correct code
- Search by product or service name in an HSN lookup tool and match the description to your supply.
- Cross-check on the official CBIC/GST portal rate finder for borderline items.
- Reuse the code your supplier uses on the same product's invoice.
- When genuinely unsure, confirm with your CA — wrong classification can mean the wrong rate.
Code and rate go together
The HSN/SAC code determines the GST rate. Once you have the code, use the GST rate finder to confirm the percentage, then apply it on the invoice.
Key takeaways
- HSN classifies goods; SAC classifies services.
- Digits required scale with turnover (4 → 6 → 8 for exports).
- The code determines the GST rate — match the description carefully.
- Verify borderline classifications on the GST portal or with a CA.
This guide is general information, not tax advice. GST rules and rates can change with GST Council notifications — verify specifics on the official GST portal or with your CA.
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