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HSN | HSN Description |
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HSN codes in India follow a globally accepted format but are customized for deeper classification of goods. Here’s how they are structured:
Example:
An 8-digit HSN code 10063010 can be broken down as:
This layered structure ensures uniform classification for trade, taxation, and compliance.
When businesses file GST returns, HSN codes play a critical role in reporting outward supplies.
With TallyPrime, this process becomes simpler:
HSN codes are used for the classification of goods, while SAC codes are used to classify services under GST.
HSN stands for Harmonized System of Nomenclature—a globally accepted system for classifying goods.
The requirement depends on your annual aggregate turnover (AATO):
Aggregate turnover means the total value of all taxable, exempt, export, and inter-state supplies of persons under the same PAN, calculated on an all-India basis. It excludes inward supplies liable to reverse charge and GST components like CGST, SGST, IGST, UTGST, and cess.
HSN codes must be mentioned on invoices, bills of supply, and in GSTR-1 returns.
Globally, HSN codes are 6 digits. In India, they may extend to 8 digits for more specific classification.
SAC stands for Service Accounting Code. Like HSN for goods, SAC is used to classify services under GST.
Yes. HS (Harmonized System) Code and HSN Code are the same, with the terminology varying across regions.
Yes. As per GST rules, businesses must mention 4-digit or 6-digit HSN codes on invoices depending on turnover.
No. GST invoices without applicable HSN codes are considered non-compliant.
Yes, the HSN system was developed by the World Customs Organisation (WCO) and is used globally. While the 6-digit structure is standard, some countries (including India) extend it to 8 digits for detailed classification.
Yes. Even composition taxpayers and those supplying exempt goods must declare HSN codes as per GST rules.