If you have ever filled in a GST invoice and wondered what those 4-digit or 6-digit numbers next to each product line are, you have encountered HSN or SAC codes. These codes are mandatory on every GST invoice in India — yet many small business owners and freelancers add them as an afterthought or skip them entirely. This guide explains exactly what they are, how many digits you need, and how to find the right code for your business.
What is an HSN code?
HSN stands for Harmonised System of Nomenclature. It is an internationally standardised system for classifying goods, developed by the World Customs Organization (WCO) and used in over 200 countries. India adopted the HSN system for GST to create a uniform classification of all goods sold in the country.
Every physical product — from raw cotton to smartphones to packaged biscuits — has a specific HSN code. The code tells the GST system (and the tax authorities) exactly what the product is, which in turn determines the applicable GST rate. Two different businesses selling the same product should use the same HSN code.
What is a SAC code?
SAC stands for Services Accounting Code. It is India's equivalent of HSN for services — a classification system that assigns a unique code to every type of service provided in the country. SAC codes were developed by India's Central Board of Indirect Taxes and Customs (CBIC) specifically for the GST regime.
If you are a freelancer, consultant, software developer, accountant, architect, or any other service provider, your invoices will use SAC codes rather than HSN codes. Like HSN codes, the SAC code determines the applicable GST rate for that category of service.
How many digits do you need?
The number of HSN digits required on your invoice depends on your annual turnover. This rule was set by the GST Council to reduce the compliance burden on very small businesses while maintaining detail for larger ones:
| Annual Turnover | HSN Digits Required | Example |
|---|---|---|
| Up to ₹5 crore | 4 digits | 1001 (wheat) |
| Above ₹5 crore | 6 digits | 100110 (durum wheat) |
| Exporters | 8 digits | 10011010 (durum wheat, for sowing) |
For SAC codes used by service providers, the standard is a 6-digit code in most cases, though 4-digit summary codes are acceptable for businesses below ₹5 crore turnover.
How HSN codes are structured
HSN codes follow a hierarchical structure. Each additional digit narrows down the classification of the product:
- First 2 digits — Chapter (broad category, e.g., Chapter 10 = Cereals)
- First 4 digits — Heading (sub-category, e.g., 1001 = Wheat and meslin)
- First 6 digits — Sub-heading (further detail, e.g., 100110 = Durum wheat)
- All 8 digits — Tariff item (most specific classification for export purposes)
Most businesses in India deal with 4-digit or 6-digit codes. The 8-digit codes are primarily used for export documentation and customs purposes.
Common HSN and SAC codes — quick reference
Here are some of the most frequently used codes by small businesses and freelancers in India:
Commonly used HSN codes (goods)
| HSN Code | Description | Common GST Rate |
|---|---|---|
| 8471 | Computers, laptops, tablets | 18% |
| 8517 | Mobile phones and smartphones | 12% |
| 6201 | Men's overcoats, jackets, garments | 12% |
| 3004 | Medicaments and pharmaceutical products | 12% |
| 0401 | Milk and cream (fresh, unprocessed) | 0% (exempt) |
Commonly used SAC codes (services)
| SAC Code | Description | Common GST Rate |
|---|---|---|
| 998314 | IT consulting and software development services | 18% |
| 998313 | Web design and development services | 18% |
| 997212 | Accounting and bookkeeping services | 18% |
| 998361 | Graphic design and visual communication | 18% |
| 999293 | Online content creation and digital services | 18% |
How to find the right HSN or SAC code
There are several ways to identify the correct code for your product or service:
- CBIC GST portal — The official portal at gst.gov.in has an HSN/SAC search tool where you can type a keyword and browse the classification hierarchy.
- BazaarSathi autocomplete — Our invoice tool has a built-in search that lets you type a product or service name and find the most commonly used matching code instantly.
- Your existing GST registration certificate — Your GST registration certificate lists the HSN or SAC codes associated with your business activities as declared during registration. This is a reliable starting point.
- Your CA or tax consultant — For businesses with complex product mixes or unusual services, a chartered accountant familiar with GST can confirm the correct classification.
HSN summary in GSTR-1
Beyond appearing on individual invoices, HSN codes also matter for your monthly or quarterly GST return filing. Businesses with turnover above ₹5 crore must include an HSN-wise summary of all supplies in their GSTR-1 return. This means the HSN codes you use on invoices must be consistent with what you report in your returns — another reason accuracy at the invoice stage saves time later.
Quick summary
HSN codes classify physical goods; SAC codes classify services. Both are mandatory on GST invoices in India. The number of digits you need depends on your turnover — 4 digits for most small businesses, 6 for larger ones, 8 for exports. Using the correct code ensures the right GST rate is applied, your buyer's ITC claim is valid, and your GST returns reconcile cleanly. BazaarSathi's built-in search makes finding the right code fast and straightforward.