What is an HSN Code?
HSN = Harmonized System of Nomenclature — an internationally standardised 6-digit classification system for goods. India extends it to 8 digits.
SAC = Services Accounting Code — similar 6-digit system for services. SAC codes start with "99".
Structure
| Digits | Level | Example (HSN 4818 90 90 — cardboard cartons) |
|---|---|---|
| First 2 | Chapter | 48 — Paper and paperboard |
| First 4 | Heading | 4818 — Toilet paper, tissues, cellulose products |
| First 6 | Sub-heading (international) | 4818 90 — Other cellulose articles |
| All 8 | Tariff item (India) | 4818 90 90 — Other articles |
Mandatory HSN Digits
| Annual turnover | HSN digits | Applies to |
|---|---|---|
| Up to ₹5 crore | 4 digits | B2B mandatory; B2C optional |
| Over ₹5 crore | 6 digits | All invoices |
| Exports/imports | 8 digits | All international trade |
Major SAC Categories
| Code | Service Category |
|---|---|
| 99 54 | Construction services |
| 99 61, 62 | Wholesale, retail trade services |
| 99 65 | Goods transport services |
| 99 71 | Financial and insurance services |
| 99 72 | Real estate services |
| 99 82 | Legal and accounting services |
| 99 83 | Other professional services |
| 99 84 | Telecommunications |
| 99 87 | Maintenance, repair, installation |
How to Find Your HSN Code
- GST portal search — gst.gov.in → Services → User Services → Search HSN/SAC code
- CBIC tariff — official customs tariff lists every HSN
- Industry association — most trade bodies publish recommended HSN lists for their sector
- Your supplier's invoice — often the easiest starting point
Common HSN Mistakes
- Using only 4-digit HSN when 6 is mandatory (turnover > ₹5 crore)
- Classifying under broad headings when sub-heading is required
- Same product using different HSN at different times — inconsistency triggers notices
- Picking HSN based on rate (wrong) instead of product nature (right)
In iAccounting
iAccounting has the entire CBIC HSN tree pre-loaded. Type "shirt" or "consultancy" in the search and pick the right code — tax rate is applied automatically. HSN summary for GSTR-1 is auto-generated.
See HSN handling →Continue Learning
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