HSN Code on GST Invoice: When It's Mandatory & How to Find Yours
HSN (Harmonised System of Nomenclature) codes are required on every GST invoice in India. Whether you sell goods or services, you need the right code. Using the wrong HSN code or the wrong number of digits can make your invoice non-compliant. This guide tells you exactly what is required based on your turnover.
By Arjun Sharma· GST & Tax Compliance Specialist···Reviewed for GST accuracy
No signup required₹6.36 Cr+ invoice value processedTrusted by 300+ businessesFree forever
Free Tool — No Login Required
Create GST Invoice with Correct HSN/SAC Code
Auto CGST/SGST/IGST split
PDF in 30 seconds
No signup needed
Free forever
What you get:
GST-compliant PDF
Shareable invoice link
UPI QR on invoice
GSTIN validation
What is an HSN Code?
HSN is an internationally standardised 6-digit product classification system used by 200+ countries. India extends it to 8 digits for customs purposes. For GST, the number of digits required on invoices depends on your annual turnover. Services use SAC (Service Accounting Codes), not HSN.
HSN Code Requirements by Turnover (from April 2021)
Annual Aggregate Turnover
HSN Digits on Invoice
Applies To
Up to ₹5 crore
4-digit HSN
B2B invoices (mandatory); B2C invoices (optional)
Above ₹5 crore
6-digit HSN
All invoices — B2B and B2C
Export / SEZ invoices
8-digit HSN
Regardless of turnover
Composition dealers
4-digit HSN
On Bill of Supply
Important
Before April 2021, small taxpayers (under ₹1.5 crore turnover) were exempt from HSN. That exemption has been removed. All GST-registered businesses must now show HSN/SAC codes.
Skip the manual work
Try the Free GST Invoice Generator
Instead of manually formatting invoices in Excel, generate GST-compliant invoices instantly — automatic CGST, SGST & IGST calculation, PDF download, and shareable link.
If you provide services, you use SAC (Service Accounting Code) instead of HSN. SAC codes are 6 digits and begin with "99".
Service Type
SAC Code
GST Rate
IT/software services
998314 / 998313
18%
Management consulting
998311
18%
Legal services
998212
18%
Accounting / bookkeeping
998222
18%
Architecture / engineering
998311
18%
Healthcare services
999311
Exempt
Educational services
999210
Exempt (most)
Restaurant services (AC)
996331
5% (no ITC)
Freight transport (road)
996511
5%
Rental of commercial property
997212
18%
Common HSN Codes for Goods
Product Category
HSN Range
GST Rate
Agricultural produce (most)
0101–2401
Nil / 5%
Textiles and garments
5001–6309
5% / 12%
Footwear
6401–6405
5% / 12%
Iron and steel
7201–7326
18%
Electronic components
8501–8548
18%
Mobile phones
8517
12%
Computers and laptops
8471
18%
Motor vehicles
8701–8705
28% + Cess
Medicaments / pharmaceuticals
3001–3006
5% / 12%
Furniture
9401–9403
12% / 18%
How to Find Your Correct HSN Code
There are three reliable ways to find your HSN code:
GST Council Portal — go to gst.gov.in and use the HSN/SAC search tool. Enter your product or service description.
CBIC HSN master — the Central Board of Indirect Taxes and Customs publishes the complete HSN schedule.
Your CA or tax consultant — for complex products or services with multiple possible codes, professional advice avoids costly errors.
Consequences of Wrong HSN Code
Using an incorrect HSN code is a compliance violation. Consequences include:
ITC mismatch for your buyer — GSTN reconciliation may flag discrepancies
GST audit scrutiny — tax officers compare HSN codes to the rate applied
Demand notice if wrong HSN led to underpayment of tax
Penalty under Section 122 of CGST Act — up to ₹10,000 or the tax amount involved
FAQs
Do I need HSN code for B2C invoices under ₹5 crore turnover?
For B2C invoices and turnover under ₹5 crore, HSN codes on invoices are optional (but mandatory in GSTR-1/IFF). However, it is best practice to include 4-digit HSN on all invoices.
What is the difference between HSN code and SAC code?
HSN (Harmonised System of Nomenclature) classifies goods. SAC (Service Accounting Code) classifies services. Both are 6-digit codes. All SAC codes start with "99". Never use an HSN code for a service or vice versa.
Can the same business have both HSN and SAC codes on one invoice?
Yes. If you supply both goods and services (e.g., supply of software + installation service), each line item should show the correct code — HSN for the goods portion, SAC for the service portion.
Is HSN code mandatory in GSTR-1?
Yes. HSN/SAC summary is required in GSTR-1 for all registered taxpayers, regardless of B2B or B2C status. The number of digits matches the invoice requirement based on turnover.
What if I don't know my HSN code when creating an invoice?
Do not guess. Use the GST portal HSN search tool or consult your CA. An incorrect HSN code creates compliance problems for both you and your buyer.
Why Businesses Stop Using Excel for GST Invoices
Manual GST calculation mistakes
One wrong CGST/SGST split or a misapplied rate triggers notices and ITC denial for your buyer.
Slow invoice creation
Copying last month's Excel file, updating dates, recalculating — 20 minutes for what should take 30 seconds.
Formatting breaks on every device
Excel invoices look different on every printer and PDF converter. Clients complain about unreadable layouts.
No easy sharing or payment link
Sending PDFs over WhatsApp with no way for clients to pay directly slows down collections.
Incorrect tax type (IGST vs CGST+SGST)
Excel can't auto-detect intra vs inter-state supply. Wrong tax type = ITC rejected for your buyer.
Disclaimer: The information in this article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. GST rules and rates are subject to change. Consult a qualified CA or tax professional before making compliance decisions.
Build a Compliant Invoice with HSN Code Included
Create professional GST invoices instantly — no Excel, no manual calculations.