Trinevia Billing
Create Free Invoice

GST India

HSN vs SAC code: what is the difference?

4 min readUpdated By Trinevia Billing

Quick answer

HSN (Harmonized System of Nomenclature) codes are for goods, and SAC (Services Accounting Code) codes are for services. Businesses with turnover up to ₹5 crore show 4-digit codes on B2B invoices, and above ₹5 crore show 6-digit codes on all invoices.

The difference

HSN codeSAC code
Used forGoodsServices
Full nameHarmonized System of NomenclatureServices Accounting Code
Made byWorld Customs Organization, used in about 200 countriesIndian tax department
Looks like2523 (cement), 7214 (steel bars)998314 (IT design services), starts with 99

How many digits do you need?

Turnover in the last financial yearDigits on invoices
Up to ₹5 crore4 digits, required on B2B invoices, optional on B2C
More than ₹5 crore6 digits on all invoices

Exports and imports use 8-digit codes.

How to find the right code

  1. Search the HSN/SAC list on the GST portal (Services, then User Services, then Search HSN/SAC).
  2. Look at your supplier's invoice for the same item. It usually shows the code.
  3. Check with your accountant if your product fits more than one heading, because the code decides the GST rate.

Tip: The code and the GST rate go together. Using the wrong code can mean the wrong rate, and penalties later.

Questions

Is HSN code mandatory for small businesses?

If your turnover is up to ₹5 crore, a 4-digit HSN or SAC is required on invoices to registered businesses (B2B). It is optional on invoices to consumers (B2C).

Where do I write the HSN code on the invoice?

In its own column next to each item, usually called HSN/SAC.

Do I need HSN codes outside India?

Many countries use the same international HS codes for customs, but not usually on normal sales invoices. Trinevia Billing hides the HSN column for countries other than India.

Related guides