GST and invoicing
What is an HSN code? Meaning, digits and examples
Definition
HSN code: An HSN code is the number that classifies a product for GST under the international Harmonised System; services use a similar SAC code.
Also called: HSN, Harmonised System of Nomenclature, HSN/SAC code, SAC code, HSN number
What an HSN code is
HSN stands for Harmonised System of Nomenclature, the international system for classifying goods that India uses for customs and for GST. Each code points to a group of products, and the GST rate for a product is decided by its classification. Services use a Services Accounting Code, or SAC, in the same way.
The code gets more specific as it gets longer. The first 2 digits are the chapter, 4 digits the heading and 6 digits the sub-heading, and India's tariff adds 2 more for an 8-digit code. Two products with the same first 4 digits belong to the same family, but may still differ at 6 or 8 digits.
How many HSN digits to show on a GST invoice
Rule 46 of the CGST Rules requires the HSN code on a tax invoice. Notification 78/2020-Central Tax sets the number of digits from 1 April 2021, based on your aggregate turnover in the previous financial year:
- Up to ₹5 crore: 4 digits.
- More than ₹5 crore: 6 digits.
- Businesses up to ₹5 crore need not show these digits on invoices to unregistered buyers (B2C sales).
Common HSN code mistakes
The code you choose also feeds your GST returns, which include an HSN-wise summary of sales, so a wrong code repeats on every invoice and every return. Watch for these:
- One code for everything. A spice maker selling whole spices and ready blends may need different codes, and possibly different rates.
- Copying the supplier's code. If you process, mix or repack goods, what you sell can fall under a different code from what you bought.
- Guessing the rate. Since 22 September 2025 most goods are taxed at 5% or 18%, with 40% for a short list and a few special rates, so check the current rate for your code on the CBIC or GST portal, or with your accountant.
Worked example
Reading an HSN code for wheat flour
A flour mill selling packed atta uses heading 1101 (wheat or meslin flour), which sits in chapter 11, the products of the milling industry. With turnover of ₹3.2 crore last year, it prints 1101 on its B2B invoices. In the year its turnover passes ₹5 crore, nothing changes until the next financial year begins; from then on it prints the 6-digit code 110100.
In managemate
Each product in managemate has an HSN / SAC code field that takes letters and numbers up to 20 characters, shown beside the GST rate in the product list and included in product search. The code is copied onto each order line when the order is saved, and A4 tax invoices print an HSN column whenever a line has one; delivery challans and goods received notes show it too. Codes can be brought in with your products from an Excel or CSV import. managemate does not look up or check HSN codes or GST rates, and it does not produce an HSN-wise summary for your return, so set the right code and rate on each product with your accountant.
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