HSN code on a GST invoice: 4 or 6 digits?

HSN (Harmonised System of Nomenclature) is the code for goods. SAC (Services Accounting Code) is the code for services, and SAC codes start with 99. The code decides the GST rate, so the right code protects you in an audit.

How many digits?

Services follow the same rule with SAC codes. Using more digits than required is always allowed, for example 8 digits.

How to find the right code

1. Use the "Search HSN/SAC" option on the GST portal and type the product name.
2. Check the description carefully. Similar products can fall under different codes and rates.
3. Use the same code your supplier uses for the same item, if you buy and resell.
4. If you are unsure, ask your CA once and save the code against the item so it is used every time.

HSN summary in GSTR-1

GSTR-1 has a table that summarises your sales by HSN code, with quantity, taxable value and tax. The GST portal now asks you to report B2B and B2C sales separately in this table and to pick codes from a list. Software that keeps HSN on every line can build this table for you. CoreAnalytiq puts it in your GSTR-1 Excel automatically.

What if the HSN is wrong or missing?

A missing or wrong HSN code can lead to a notice and a penalty of up to ₹25,000 under Section 125 of the CGST Act. A wrong code can also mean the wrong tax rate, which is a bigger problem. Save the correct code with each item once and you will not have to think about it again.