HSN vs SAC Codes: What's the Difference and How to Find Yours
HSN vs SAC: HSN codes classify goods and SAC codes classify services under GST. The difference, how many digits to show and where to look them up.
Quick answer
The HSN vs SAC difference is simple. HSN (Harmonised System of Nomenclature) codes classify goods. SAC (Services Accounting Codes) classify services. Both appear on GST invoices and returns so that the right tax rate applies. If your aggregate turnover was up to ₹5 crore last year, show at least 4 digits on B2B invoices; above ₹5 crore, show 6 digits on every invoice.
HSN codes, for goods
HSN is an international system maintained by the World Customs Organization. India uses it with extra digits. Codes run from broad to specific:
- 2 digits: chapter, for example 48 for paper and paperboard.
- 4 digits: heading, for example 4819 for cartons, boxes and cases.
- 6 digits: sub-heading, which narrows the product further.
- 8 digits: tariff item, used mainly for imports and exports.
SAC codes, for services
SAC codes are India's classification for services under GST. They always start with 99 and usually have 6 digits. The next two digits give the service group, and the last two the specific service.
Key differences
| HSN | SAC | |
|---|---|---|
| Classifies | Goods | Services |
| Origin | International (World Customs Organization) | Indian (CBIC) |
| Format | 2 to 8 digits | 6 digits, starting with 99 |
| Where it appears | Invoices and the HSN summary in GSTR-1 | Invoices and the HSN summary in GSTR-1 |
How many digits to show
| Aggregate turnover in the previous year | B2B invoices | B2C invoices |
|---|---|---|
| Up to ₹5 crore | At least 4 digits | Optional |
| Above ₹5 crore | 6 digits | 6 digits |
The same digit rules apply to the HSN-wise summary in GSTR-1, which is now reported in separate B2B and B2C sections.
How to find your code
- Search the HSN and SAC lookup on the GST portal, or the CBIC GST rate finder.
- Read the description carefully. Similar products can fall under different headings with different rates.
- Confirm the rate linked to that code in the current rate notification, especially after the September 2025 rate changes.
- If an item could fit more than one heading, ask your chartered accountant and keep their advice on file.
Examples for creative and tech businesses
These codes are common in design, marketing and software work. Check each one against the official list for your exact service before you print it on an invoice.
| Service or product | Code | Official description (short) |
|---|---|---|
| Software development | 998314 | IT design and development services |
| IT consulting | 998313 | IT consulting and support services |
| Advertising | 998361 | Advertising services |
| Graphic, packaging and other design | 998391 | Specialty design services |
| Corrugated cartons and boxes | HSN 4819 | Cartons, boxes and cases of paper or paperboard |
Why the right code matters
- The code decides the rate. A wrong code can mean tax paid short, with interest and a penalty on top.
- Your B2B buyers rely on your codes for their own records.
- Consistent codes keep your GSTR-1 HSN summary in line with your invoices.
Common mistakes
- Putting an HSN code on a service invoice.
- Copying a code from a competitor's invoice without checking it.
- Showing fewer digits than your turnover requires.
- Not updating codes and rates in your item list after the 2025 rate changes.
Frequently asked questions
Can one invoice have both HSN and SAC codes?
Is there a penalty for a wrong HSN code?
Do I need an HSN code if I am not registered for GST?
Is SAC the same as HSN for services?
Next step
Make a short list of the codes you use, check each one once, and save them with your products and services. In PikZiy Books you set the HSN or SAC once per item, and every invoice and the GSTR-1 summary pick it up from there.
