HSN code: meaning and GST invoice requirements
An HSN code classifies goods under GST. Businesses with turnover up to ₹5 crore show 4 digits on B2B invoices; above ₹5 crore, 6 digits on all invoices.
Short answer
An HSN (Harmonized System of Nomenclature) code is an internationally recognised numerical code used to classify goods, developed by the World Customs Organization. India uses it under GST and customs to determine tax rates. GST invoices must show the HSN code at 4 or 6 digits depending on the business's aggregate turnover.
- Developed by
- World Customs Organization
- Turnover up to ₹5 crore
- 4 digits on B2B invoices
- Turnover above ₹5 crore
- 6 digits on all invoices
- Imports and exports
- 8 digits under the customs tariff
How HSN codes are structured
The HSN system groups goods into sections, chapters, headings and sub-headings. The first two digits indicate the chapter, the first four the heading, and six digits the internationally harmonised sub-heading. India adds two more digits at the tariff item level, giving eight digits in the customs tariff. GST rate notifications refer to HSN chapters, headings or tariff items, so the correct code determines the correct rate.
Invoice and return requirements
From 1 April 2021, businesses with aggregate turnover up to ₹5 crore in the previous year must show at least four-digit HSN codes on B2B tax invoices, and those above ₹5 crore must show six digits on all tax invoices. GSTR-1 also includes an HSN-wise summary of outward supplies, and the GST portal has progressively required codes to be selected from a validated list rather than typed in. Services use SAC codes, which follow a similar structure starting with 99.
Why it matters for startups
After the GST rate rationalisation effective 22 September 2025, rates for many goods moved between slabs, which made correct classification even more important. A wrong HSN code can mean the wrong rate, short payment with interest, or disputes with customers over credit. If classification is unclear, take professional advice or consider an advance ruling.
Related services
Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is HSN code mandatory on B2C invoices?
For businesses with aggregate turnover up to ₹5 crore, the four-digit requirement applies to B2B invoices. Above ₹5 crore, six-digit codes are required on all tax invoices.
Where can I find the HSN code for my product?
The GST portal provides a search tool for HSN codes and rates, and the customs tariff lists the full codes.
What if I use the wrong HSN code?
If it results in a lower rate, you may owe the difference with interest and penalties. Correct it promptly and amend affected returns where possible.