HSN code
Harmonised System of Nomenclature
An HSN code is an internationally standardised number that classifies a product for tax purposes, and the GST rate applicable to a sale follows from it.
HSN is a global classification maintained by the World Customs Organization, which is why the same code identifies cotton yarn in an Indian GST invoice and in a customs declaration in Germany. India extends the international six digits to eight for finer distinctions.
How many digits you must show depends on your turnover, and the requirement has tightened over time. Getting the code wrong is not a formatting error — it determines the rate, so a wrong HSN means the wrong tax, which surfaces later as a short payment with interest.
Services use SAC codes, which follow the same idea under a separate scheme. A business supplying both needs both.
Key facts
- Six digits are the international standard; India uses up to eight.
- Businesses with aggregate turnover up to ₹5 crore report 4 digits on B2B invoices.
- Businesses above ₹5 crore report 6 digits.
- The HSN summary is reported in GSTR-1.
- Services are classified under SAC rather than HSN.
Who this affects
Every business issuing GST invoices for goods, and every importer or exporter filing customs documents.
How YarnTally handles it
There is an HSN tariff library you can search, with per-organisation entries overriding the shared list, so a code you have settled on for a product stays attached to it on every future invoice.
See what else it doesReviewed September 2026. This is general information about how these rules work, not tax or legal advice, and thresholds and due dates do change. Check your own position with your chartered accountant before acting on it.