HSN for goods, service classification for services
HSN stands for Harmonized System of Nomenclature. It is the international classification system used to identify goods.
Services under GST use service classification codes, commonly referred to as SAC codes.
These codes provide a standard way to describe what was supplied. They are used across invoices, returns and other GST records, subject to the requirements that apply to the taxpayer and transaction.
How many HSN digits do you need?
For tax invoices, the required level of HSN disclosure can depend on the supplier's aggregate turnover and the type of supply.
Under the notification framework that took effect from 1 April 2021:
- Taxpayers with aggregate turnover above ₹5 crore in the preceding financial year generally use 6-digit HSN codes on invoices.
- Taxpayers with aggregate turnover up to ₹5 crore generally use 4-digit HSN codes for supplies to registered persons; the notification provides an exemption for certain supplies to unregistered persons.
Separate requirements can apply to imports, exports, e-invoicing and return reporting. Do not assume that a single digit rule covers every document your business files.
How to find the right code
The safest starting point is the Search HSN Code facility on the GST Portal. It lets you search by code or by a description of the goods or services.
Treat the search result as a classification aid rather than legal advice. If two codes appear plausible, or the classification changes the GST rate materially, verify the position before invoicing.
Avoid copying a code from another supplier's invoice simply because the description looks similar. Small differences in the product or service can matter.
Does the code determine the GST rate?
Classification and tax rate are closely connected, but the code alone should not be treated as a substitute for checking the applicable rate notification and any exemptions or conditions.
For common products and services the answer may be straightforward. For unusual supplies, bundles or mixed/composite arrangements, classification can become more involved.