What is an HSN code and why is it mandatory on GST invoices?

HSN (Harmonized System of Nomenclature) is an internationally standardized system of names and numbers to classify traded products. In India's GST system, HSN codes are mandatory on tax invoices to identify goods and determine the applicable GST rate. For businesses with turnover up to ₹5 Crore, 4-digit HSN codes are mandatory on B2B invoices. For turnover above ₹5 Crore, 6-digit HSN codes are mandatory on all invoices (B2B and B2C). HSN codes have 4, 6, or 8 digits — the more digits, the more precise the classification. For services, SAC (Services Accounting Code) is used instead of HSN, always 6 digits starting with '99'.

How many digits of HSN code are required based on turnover in FY 2025-26?

As per CBIC Notification 78/2020-CT (as amended), the HSN digit requirement for FY 2025-26 is: (1) Turnover up to ₹5 Crore — 4-digit HSN mandatory on B2B invoices, optional on B2C invoices. (2) Turnover above ₹5 Crore — 6-digit HSN/SAC mandatory on ALL invoices (B2B and B2C). Additionally, GSTR-1 Table 12 (HSN-wise summary) requires the same minimum digits as your invoices. Using 8-digit HSN codes is optional but recommended for precise product classification and to avoid rate disputes.

What is the difference between HSN and SAC codes?

HSN (Harmonized System of Nomenclature) codes classify GOODS and have 4, 6, or 8 digits. Examples: 8471 (laptops), 2523 (cement), 7113 (gold jewellery). SAC (Services Accounting Code) codes classify SERVICES and always have 6 digits starting with '99'. Examples: 998314 (IT services), 996331 (restaurant services), 998311 (consulting). On a GST invoice, you use HSN for goods and SAC for services. Both are required in GSTR-1 Table 12. The GST rate is determined by the HSN/SAC code — the same product/service must use the same code across all invoices.

What are the main GST rate slabs and which products fall under each?

GST has 5 main rate slabs: (1) 0% — essential goods like fresh milk, fruits, vegetables, wheat, rice (unbranded/unpackaged), education, healthcare services. (2) 5% — packaged food items, tea, coffee, sugar, economy textiles, restaurant services (without ITC), LPG, electric vehicles. (3) 12% — processed food, medicines, hotels (₹1,000-₹7,500 tariff), construction services, marble blocks. (4) 18% — most manufactured goods (electronics, steel, appliances), IT services, consulting, telecom, commercial rent. (5) 28% — luxury/demerit goods: cement, air conditioners, motor cars (plus cess on cars, tobacco, aerated drinks). Additionally: gold/jewellery at 3%, diamonds at 1.5%, and Compensation Cess of 1-22% on select items like cars and tobacco.

How do CGST, SGST, and IGST relate to HSN codes on invoices?

The HSN/SAC code determines the GST rate (e.g., 18% for laptops under HSN 8471). How this rate is split depends on the supply type: (1) Intra-state supply (seller and buyer in same state): The rate is split equally into CGST (Central GST) and SGST (State GST). For 18% GST: CGST 9% + SGST 9% = 18% total. (2) Inter-state supply (seller and buyer in different states): The full rate is charged as IGST (Integrated GST). For 18% GST: IGST 18%. The total tax amount is identical in both cases — only the split differs. Place of Supply rules under IGST Act Sections 10-13 determine whether a supply is intra-state or inter-state. The invoice must show the correct split based on supply type.

GST HSN/SAC Code Lookup Calculator India — FY 2025-26

Look up HSN codes (goods) and SAC codes (services) with applicable GST rates. Search 70+ common items across food, electronics, construction, textiles, gold, automobiles, IT services, restaurants, and more. Calculate invoice amounts with CGST/SGST or IGST split. Check whether your HSN digit usage is compliant with your turnover slab. Updated for FY 2025-26.

Search and browse HSN codes (goods) and SAC codes (services) with GST rates

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Type a product name, HSN/SAC code number, or category to filter the database of 79+ items

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How to Use This Calculator

HSN/SAC Lookup tab

Search by product name, HSN/SAC code number, or keyword (e.g., “laptop”, “8471”, “restaurant”). Filter by category to narrow results. Click any item to see the full GST rate breakdown — CGST/SGST split for intra-state and IGST for inter-state supply. The database covers 70+ common HSN and SAC codes across food, electronics, construction, textiles, gold, automobiles, pharma, IT services, hospitality, transport, and more.

Invoice Calculator tab

Select an HSN/SAC code from the dropdown, enter quantity and unit price (excl. GST), and choose intra-state or inter-state supply. The calculator computes taxable value, CGST+SGST or IGST, compensation cess (if applicable), and total invoice amount. Use this to verify invoice amounts before issuing.

HSN Compliance Check tab

Enter your annual aggregate turnover and the number of HSN digits you currently use on invoices. The calculator checks whether you meet the mandatory 4-digit or 6-digit requirement based on your turnover slab, and also checks whether e-invoicing is mandatory for your business.

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The Formula

GST invoice calculation involves determining the taxable value and applying the correct rate based on the HSN/SAC code and supply type.

Taxable Value:
Taxable Value = Quantity × Unit Price (excl. GST)

Intra-State Supply (same state):
CGST = Taxable Value × (GST Rate ÷ 2)
SGST = Taxable Value × (GST Rate ÷ 2)
Total Tax = CGST + SGST + Compensation Cess (if any)

Inter-State Supply (different state):
IGST = Taxable Value × GST Rate
Total Tax = IGST + Compensation Cess (if any)

Invoice Total = Taxable Value + Total Tax

HSN Digit Requirement:
Turnover ≤ ₹5 Crore: 4-digit HSN on B2B invoices (B2C optional)
Turnover > ₹5 Crore: 6-digit HSN on ALL invoices

The GST rate is determined by the HSN code (for goods) or SAC code (for services). India follows the international HS classification with India-specific 8-digit extensions. The first 2 digits identify the Chapter, 4 digits the Heading, 6 digits the Sub-heading, and 8 digits the Tariff Item.

Example

Ramesh — Electronics distributor selling 50 laptops to a buyer in another state

Ramesh runs an electronics distribution business (turnover ₹12 Crore). He is selling 50 laptops at ₹45,000 each (excl. GST) to a buyer in another state. The laptops fall under HSN 8471 at 18% GST.

Step 1: HSN Code Lookup

ProductLaptops — data processing machines

HSN Code8471

GST Rate18% (CGST 9% + SGST 9% or IGST 18%)

Compensation CessNil

Step 2: Invoice Calculation

Quantity50 units

Unit price (excl. GST)₹45,000

Taxable value50 × ₹45,000 = ₹22,50,000

Supply typeInter-state (buyer in different state)

IGST @ 18%₹4,05,000

Invoice total₹26,55,000

Step 3: HSN Compliance Check

Annual turnover₹12 Crore (above ₹5 Cr)

Required HSN digits6-digit (mandatory on all invoices)

Ramesh uses4-digit (8471)

Compliance statusNON-COMPLIANT — needs 847110 or 847130

E-invoice mandatory?YES — turnover above ₹5 Cr

Ramesh needs to update his invoicing software to use 6-digit HSN codes (e.g., 847130 for laptops) and ensure all B2B invoices have a valid IRN from the e-invoice portal.

GST Rate Slabs & Common Items

▶ 0% GST — Exempt / Nil-Rated Items

Goods: Fresh milk, fruits, vegetables, wheat (unpackaged), rice (unpackaged), pulses (unpackaged), bread (plain), fresh meat/fish, eggs, curd, lassi, buttermilk, natural honey, salt, jaggery, live animals.

Services: Healthcare (clinical establishments, authorized medical practitioners), education (pre-school to higher secondary, approved degree programs), agricultural services, public transport (non-AC bus, metro, local train).

Note: Pre-packaged and labelled food items (rice, wheat, pulses, flour) attract 5% GST since 18 July 2022 (Notification 6/2022-CT Rate).

▶ 5% GST — Mass Consumption Items

Goods: Packaged food items (rice, wheat, pulses, flour), sugar, tea, coffee, edible oils, spices, milk powder, kerosene (PDS), LPG (domestic), coal, fertilizers, economy textiles (≤₹1,000), footwear (≤₹1,000), newsprint, electric vehicles.

Services: Restaurant services (5% without ITC), goods transport by road (GTA, 5% without ITC option), rail transport (goods), small housekeeper services, tour operator services (5% without ITC).

Construction: Affordable housing (1% for carpet ≤60/90 sqm and value ≤₹45L), other residential (5% without ITC), fly ash bricks (5%).

▶ 12% GST — Standard Rate (Lower)

Goods: Processed food, butter, ghee, dry fruits, fruit juices (packaged), marble/granite (crude blocks), umbrellas, sewing machines, medical instruments, solar modules, apparel above ₹1,000.

Services: Hotel accommodation (₹1,001–₹7,500 tariff), works contract to government, construction of commercial property (with ITC), GTA services (12% with ITC option), air transport (economy class).

▶ 18% GST — Standard Rate (Higher)

Goods: Most manufactured goods — laptops (8471), mobile phones (8517), TVs (8528), printers, steel, aluminum, stationery, packaged drinking water, biscuits (>₹100/kg), ice cream, sanitaryware, plywood, paints, tyres, footwear (>₹1,000).

Services: IT services (software, BPO, hosting), consulting, legal, accounting/CA, telecom, banking/financial services, commercial rent, hotel accommodation (>₹7,500 tariff), works contract (private), courier, event management, restaurants in hotels (>₹7,500 tariff), coaching/tuition (commercial).

▶ 28% GST + Cess — Luxury / Demerit Goods

Goods at 28%: Cement, air conditioners, motor cars, two-wheelers (>350cc), washing machines (select), dishwashers, weighing machines, paints (select), automobile parts.

28% + Compensation Cess:

Motor cars: Small petrol (<1200cc, <4m) +1% cess; small diesel (<1500cc, <4m) +3% cess; mid-size +17% cess; large/luxury +20% cess; SUV +22% cess
Aerated drinks: 28% + 12% cess = 40% effective
Tobacco/cigarettes: 28% + cess varies (up to 290% for cigarettes)
Pan masala: 28% + cess varies

Services at 28%: Gambling, betting, horse racing, casino (28% on full face value from Oct 2023), cinema tickets (>₹100).

▶ Special Rates — Gold, Diamonds, Rough Precious Stones

Gold (unwrought, semi-manufactured, jewellery): 3% GST. HSN 7108, 7113. Making charges on jewellery: 5% GST.

Silver (articles, silverware): 3% GST. HSN 7114.

Diamonds (cut & polished): 1.5% GST. HSN 7102. Rough diamonds: 0.25%.

Rough precious/semi-precious stones: 0.25% GST.

HSN Code Digit Requirement — Rules & Timeline

▶ HSN Digit Rules for Invoices & GSTR-1 (FY 2025-26)

Turnover Slab	B2B Invoices	B2C Invoices	GSTR-1 Table 12
Up to ₹5 Crore	4-digit mandatory	Optional	4-digit minimum
Above ₹5 Crore	6-digit mandatory	6-digit mandatory	6-digit minimum
Any turnover (best practice)	8-digit recommended	8-digit recommended	As per invoice

Legal basis: Notification 78/2020-CT dated 15 October 2020, as amended by subsequent CBIC notifications. Turnover is aggregate turnover in the preceding financial year (PAN-level, all GSTINs combined).

▶ HSN Code Structure — 2, 4, 6, 8-Digit Breakdown

Digits	Level	Example (Laptops)	Description
2-digit	Chapter	84	Nuclear reactors, boilers, machinery
4-digit	Heading	8471	Automatic data processing machines
6-digit	Sub-heading	847130	Portable data processing machines ≤10 kg
8-digit	Tariff item	84713010	Laptop computers (India-specific tariff)

The first 6 digits follow the international WCO Harmonized System used by 200+ countries. The 7th and 8th digits are India-specific extensions for customs/GST tariff purposes.

FAQ

What happens if I use the wrong HSN code on my GST invoice? ▼

Using an incorrect HSN code can lead to several problems: (1) Wrong GST rate — If the HSN code maps to a different rate, you may overcharge or undercharge GST. Undercharging creates a tax liability + interest. (2) ITC mismatch for buyer — If the HSN code on your invoice doesn't match the buyer's classification, it may flag during GSTR-2B reconciliation. (3) GSTR-1 HSN summary errors — Table 12 aggregates by HSN code; wrong codes create discrepancies. (4) E-way bill rejection — For goods transport, HSN code on the e-way bill must match the invoice. (5) Scrutiny/audit risk — The GST department uses HSN codes for risk profiling. Persistent misclassification can trigger Section 61 scrutiny or Section 65 audit notices.

Do I need HSN codes on B2C invoices if my turnover is below ₹5 Crore? ▼

No, HSN codes are optional on B2C invoices if your turnover is up to ₹5 Crore. However, 4-digit HSN is mandatory on B2B invoices even at this turnover level. For GSTR-1 Table 12 (HSN-wise summary), you still need to report HSN codes for your outward supplies at the 4-digit level. Best practice: Use 4-digit HSN on all invoices regardless of B2B/B2C, as it simplifies GSTR-1 filing and avoids errors.

Where can I find the correct HSN/SAC code for my product or service? ▼

Multiple reliable sources: (1) CBIC GST Portal HSN Search (cbic-gst.gov.in) — official search tool with all 20,000+ codes and rates. (2) GST Portal (services.gst.gov.in) — search HSN during GSTR-1 filing. (3) Customs Tariff Act schedules — the legal source for HSN codes; available on cbic.gov.in. (4) This calculator — covers 70+ most common codes. For edge cases or ambiguous classifications, consult a tax professional or apply for an Advance Ruling under Section 98 of the CGST Act from the Authority for Advance Rulings (AAR) in your state.

My product could fall under two different HSN codes with different rates. What do I do? ▼

This is a classification dispute, which is common in GST. Steps to resolve: (1) Check the Section Notes and Chapter Notes in the GST Tariff — they contain specific inclusion/exclusion rules. (2) Apply the General Rules for Interpretation (GRI) of the HSN — Rule 1 (section/chapter notes prevail), Rule 3 (specific description over general), Rule 4 (most akin classification). (3) Check AAR/AAAR rulings for similar products. (4) If still unclear, file an Advance Ruling application with your state AAR under Section 98 CGST Act (₹5,000 fee). (5) Until resolved, apply the higher rate to avoid short-payment and interest liability. Consult your CA or tax advisor.

How does the GST Compensation Cess work on top of 28% GST? ▼

The Compensation Cess (Goods and Services Tax (Compensation to States) Act, 2017) is levied on select luxury/demerit goods on top of GST. It applies only to goods notified under Schedule I-IV of the Cess Act. Key items: Motor cars (cess 1-22% depending on engine size and length), aerated drinks (12%), tobacco products (varies up to 290% for cigarettes), pan masala (varies). The cess is charged on the taxable value (same base as GST). Example: A mid-size car at 28% GST + 17% cess = 45% effective rate. Cess revenue goes to the GST Compensation Fund to compensate states for revenue loss from GST implementation. The cess was initially for 5 years (2017-2022) but extended to March 2026 to repay Covid-era borrowings.

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