The first time a CA asks for “HSN codes for all your items”, most shop owners panic a little. It sounds like a government exam. It is really just a product classification number, and once each item in your billing software has one, you never think about it again.
What HSN and SAC are
- HSN (Harmonised System of Nomenclature) codes classify goods. The system is international, and India uses it for customs and GST. The first digits group broad categories, and more digits make it more specific.
- SAC (Services Accounting Code) codes classify services under GST. SAC codes usually start with 99.
| HSN | SAC | |
|---|---|---|
| For | Goods | Services |
| Used in | GST and customs | GST |
| Example area | Textiles, electronics, food | Repairs, consultancy, transport |
| Typical start | Varies by chapter | 99 |
How many digits your invoice needs
Notification 78/2020-Central Tax set the rule, effective from 1 April 2021, based on your aggregate turnover in the previous financial year:
- Up to ₹5 crore: 4-digit HSN code on tax invoices.
- Above ₹5 crore: 6-digit HSN code.
- B2C relaxation: if your turnover was up to ₹5 crore, you may leave out the HSN code on invoices to unregistered buyers. On B2B invoices, it is still required.
Using more digits than required is fine. Using fewer is not.
Why the right code matters
- The rate follows the code. GST rates are notified against HSN and SAC codes. A wrong code can mean a wrong rate.
- Returns use it. GSTR-1 has an HSN-wise summary. Wrong codes mean a messy summary and questions later.
- E-invoices check it. If you are above ₹5 crore, the Invoice Registration Portal validates HSN codes. See e-invoicing.
How to find the right code
- Your supplier’s invoice. For goods you resell, the manufacturer or distributor’s bill usually shows the HSN. This is the easiest source.
- The government’s HSN search. The GST portal has a search for HSN and SAC codes by description.
- Your CA. For anything unusual (mixed products, kits, services bundled with goods), ask. Classification disputes are one area where a professional opinion is worth it.
A tip from experience: search by what the product *is*, not by its brand name. “Biscuits” finds the right chapter. “Parle-G” does not.
Adding codes in Vyapar
- Go to Settings > Taxes & GST and turn on HSN/SAC codes.
- Open each item and enter its code with the GST rate.
- For many items, include the HSN column in your Excel import. See importing items.
- Turn on the HSN/SAC column in print settings so it shows on the invoice. See invoice customisation.
Vyapar’s own tip for expenses: put HSN or SAC codes on expense items too, so they feed the purchase side of your GST reports. See recording expenses.
HSN after the September 2025 rate changes
When GST rates were rationalised on 22 September 2025, the HSN codes did not change, but the rates attached to many of them did. If you set up your items before that date, go through them with your CA and update the rates. See new GST rates.
How an HSN code is built
HSN codes go from broad to narrow. Each extra pair of digits makes the description more specific:
| Digits | Level | Example meaning |
|---|---|---|
| 2 | Chapter | 09: Coffee, tea, mate and spices |
| 4 | Heading | 0902: Tea |
| 6 | Sub-heading | A specific kind of tea |
| 8 | Tariff item | Used in customs, more specific still |
For GST invoices you need 4 or 6 digits depending on turnover. Many suppliers print 8 digits, and that is fine to use too. More detail never hurts.
A practical tip for big item lists
If you have hundreds of items, group them by category first. Most of a kirana store’s items fall into a few dozen headings: tea, spices, edible oils, soaps, detergents, biscuits, and so on. Find the HSN once per group, apply it to every item in that group through the Excel import, and only look up the odd ones individually.
Frequently asked questions
How many HSN digits are mandatory on GST invoices?
Four digits if your previous-year turnover was up to ₹5 crore, six digits above ₹5 crore. This has applied since 1 April 2021.
Is HSN needed on B2C invoices?
Businesses with turnover up to ₹5 crore may leave out HSN on invoices to unregistered buyers. It is still needed on B2B invoices.
What is the difference between HSN and SAC?
HSN classifies goods and SAC classifies services.
Where can I find the HSN code for my product?
Your supplier’s invoice, the HSN search on the GST portal, or your CA for unusual items.
