HSN and SAC codes on invoices: which one you need, and how many digits
The code column is the part of a GST invoice people fill in last and get wrong most often. HSN for goods, SAC for services, and the digit count depends on your turnover — here is the whole decision in one place.
Every taxable supply on a GST invoice needs a classification code: HSN (Harmonised System of Nomenclature) for goods, SAC (Services Accounting Code) for services. The codes exist so that the tax authority can see what was sold without reading your description — and so your buyer can claim input credit against the right head.
How many digits your turnover requires
The number of digits is not a choice. It scales with your annual aggregate turnover (AATO):
| Annual turnover | Digits required | Applies to |
|---|---|---|
| Up to ₹5 crore | 4 | Optional for B2C supplies, mandatory for B2B |
| Above ₹5 crore | 6 | All supplies, B2B and B2C |
| Certain chapters (61, 62, 63 — apparel; 84; 85) | 8 | Exports and specific notified goods |
Choosing the right code
The HSN code follows the goods, not your business. Software consulting, offline training and SaaS subscriptions can all sit in different heads depending on what is actually delivered. The practical checks:
- Use the GST portal’s HSN search or the CBIC tariff schedule — do not copy a code from another company’s invoice, because their supply may not match yours.
- Services use the SAC scheme, which mirrors HSN at the chapter level: 9983 covers most professional services, 9973 telecom and IT network services.
- One invoice can carry different codes per line item. If you bill a licence and implementation services together, each line gets its own code and its own rate.
- When the description and the code disagree, the description usually wins the audit. Code first, but write a description that supports it.
What happens when the code is wrong
An incorrect or missing HSN/SAC code is a definite omission under Section 31 and Rule 46, and Section 125 lets officers levy a penalty of ₹10,000 per document for it. The bigger cost is indirect: a mismatched code can stall your buyer’s input tax credit, which is how the error comes back to you as a request for a revised invoice.
How Invoicr handles it
The India GST format carries an HSN/SAC column per line and validates that the field is populated where your supply type requires it. It will not pick the code for you — that is a judgement about your supply — but it puts the column where a compliant invoice needs it and warns when it is missing. You can try it with the GST invoice generator.
A one-minute self-check
- What did you actually supply — goods (HSN) or services (SAC)?
- What was your turnover last financial year — four digits or six?
- Do any of your goods fall in the eight-digit chapters?
- Does each line item carry its own code, or have you merged different supplies into one?
- Does the description support the code you chose?
Invoicr validates structure and arithmetic, not your business facts. This is general information, not tax, accounting or legal advice — check anything consequential with your accountant.