GST
HSN & SAC Codes Under GST: What They Are & How Many Digits You Need
Pick the wrong HSN code and you can charge the wrong GST rate, fail invoice validation, and attract a notice — all from a single dropdown. Yet most small businesses guess. This guide explains HSN and SAC codes simply, how many digits the law requires for your turnover, and how to find the right one.
HSN vs SAC — the basics
- HSN (Harmonized System of Nomenclature) is a global system to classify goods. India adopted it for GST so every product maps to a code that fixes its tax rate.
- SAC (Services Accounting Code) does the same for services — consulting, software, transport, and so on.
The code on your invoice tells the system exactly what you sold and therefore what rate applies. Get it right once and your GSTR-1 filing becomes far smoother.
How many digits do you need?
The number of HSN digits required on your invoices depends on turnover:
- Turnover up to ₹5 crore: 4-digit HSN for B2B invoices (B2C optional).
- Turnover above ₹5 crore: 6-digit HSN on all invoices.
- Exports/imports: 8-digit HSN.
Reporting fewer digits than required is a common reason GSTR-1 throws errors or invoices fail e-invoice validation.
Why the wrong code is expensive
Each code carries a GST rate. Classify a 12% item under a 5% code and you've under-charged tax — the shortfall, plus interest and penalty, lands on you, not the customer. Over-charge, and your buyer disputes the invoice and may lose input tax credit. Consistency matters too: use the same code for the same product every month.
How to find your correct code
- Search the official GST portal's HSN/SAC lookup by product keyword.
- Match the description precisely — many products differ by material or use.
- Confirm the linked GST rate against the rate notification.
- Lock it into your billing software so it auto-fills every invoice.
If your catalogue spans dozens of products, a one-time classification review pays for itself. Our GST experts can map your entire product list to the correct HSN/SAC codes and rates.