What HSN and SAC codes are
HSN (Harmonised System of Nomenclature) is the international system for classifying goods, used in India’s customs tariff and in GST. The first 2 digits are the chapter, 4 digits the heading, 6 digits the sub-heading and 8 digits the Indian tariff item. SAC (Services Accounting Code) does the same for services; SAC codes start with 99.
The code decides the GST rate. Two items that look similar can sit under different codes with different rates, so getting the code right is the first step to a correct invoice.
How many digits do you need on an invoice?
Under Notification No. 78/2020-Central Tax dated 15 October 2020 (in force from 1 April 2021):
| Aggregate turnover in the previous year | HSN / SAC digits on tax invoices |
|---|---|
| Up to ₹5 crore | 4 digits on B2B invoices; optional on invoices to unregistered buyers (B2C) |
| Above ₹5 crore | 6 digits on all tax invoices |
Your GSTR-1 also has an HSN-wise summary (Table 12), so using consistent codes on every invoice saves time at return filing.
Worked example
A grocery store sells desi ghee, packaged namkeen and an aerated cola. Searching “ghee” gives 0405 90 at 5%; “namkeen” gives 2106 90 at 5%; “cola” gives 2202 10 at 40%. On one bill, each line carries its own HSN and rate, and the GST summary groups the taxable value by rate.
About the rates shown
Rates are the total GST (CGST + SGST, or IGST) under the schedule that took effect on 22 September 2025 after the 56th GST Council meeting (Notification No. 9/2025-Central Tax (Rate) for goods and No. 15/2025-Central Tax (Rate) for services, both dated 17 September 2025), with later changes such as tobacco and pan masala at 40% from 1 February 2026. Where the rate depends on price, packing or use, the finder says so: for example clothing and footwear are 5% up to ₹2,500 a piece or pair and 18% above. Where we could not verify a rate for a whole heading, we show “Check rate” rather than guess.
Common mistakes
- Picking a code by the product’s brand name instead of what it is made of or used for. Classification follows the tariff’s chapter notes.
- Using a 4-digit heading’s rate for every item under it. Rates are often set at 6 or 8 digits.
- Forgetting value-based rates. A ₹3,000 shirt and a ₹900 shirt share an HSN code but not a GST rate.
- Keeping pre-September 2025 rates in your billing software. Update your item list: in Invoiqo the rate is saved on each product, so you change it once.
Official sources
- CBIC: GST rates for goods and services
- CBIC tax information portal (CGST Act, Rules and notifications): rate notifications and Notification 78/2020-Central Tax.
- PIB: recommendations of the 56th GST Council meeting (3 Sep 2025)
Checked on 28 October 2026. This list covers common items only; for anything else, or when an item could fall under more than one heading, check the CBIC tariff or ask your tax adviser.