Regulatory & Tax

HSN Code

Harmonized System of Nomenclature — a 4-8 digit code that classifies goods under GST for tax rate determination.

Every product sold in India under GST has an HSN code. The code determines the applicable GST rate (0%, 5%, 12%, 18%, 28%) and is mandatory on tax invoices for businesses above turnover thresholds (₹5Cr — 6 digit; below — 4 digit; below ₹1.5Cr — optional from FY25-26).

The HSN system is internationally harmonized at 6 digits, with India adding 2 more for granularity. So 6109 (T-shirts) becomes 61091010 (cotton T-shirts for men) in Indian invoices.

Wrong HSN codes are the second-most-common GST notice cause after ITC mismatches. Tools like GSTN's HSN Finder or third-party SaaS auto-suggest based on product description.

India context

For Indian D2C ecom, HSN code mistakes compound across the catalog — get it wrong on 1 product, and every invoice for that product is wrong. Marketplaces (Amazon, Flipkart) require accurate HSN; mismatch flags auto-suspension.

Examples

  • Cotton T-shirt = 61091010 = 5% GST.
  • Mobile phone = 8517 = 12% GST.
  • SaaS subscription = 99 (services) at 18%.

FAQ

What's the difference between HSN and SAC?

HSN classifies goods (4-8 digits). SAC classifies services (6 digits). Both go on tax invoices, both determine GST rate. Same logic, different code system.

Do I need HSN on B2C invoices?

Yes if turnover exceeds ₹5Cr (6-digit HSN). Below ₹5Cr but above ₹1.5Cr — 4-digit. Below ₹1.5Cr (with effect FY25-26) — optional.

Can HSN code change for a product?

Yes — GST Council notifications periodically reclassify items. Track major budget announcements; ecom platforms usually notify sellers when HSN changes.

Related concepts

GSTGST rateSAC codetax invoiceGSTR-1

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Related glossary entries

GSTIN — Goods and Services Tax Identification Number — a 15-character ID assigned to every GST-registered business in India.GSTR-1 — Monthly (or quarterly) statement of outward supplies — every B2B and B2C invoice your business issued in the period.GSTR-3B — Monthly self-declared summary of all outward and inward supplies and tax liability — the form you actually pay GST against.Place of Supply (GST) — GST rule that determines which state/UT gets the tax on a transaction — drives whether CGST+SGST or IGST applies.

More in Regulatory & Tax

DPDP ActGSTINGSTR-1GSTR-3BRCM (Reverse Charge Mechanism)ITC (Input Tax Credit)RERAFSSAI
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