If you sell goods in India, every GST invoice needs an HSN code. Many small business owners get stuck on three questions: what is this code, how many digits do I need, and where do I find the right rate? This guide answers all three in plain language, with a ready reference table of common HSN codes and their GST rates for 2026.
What Is an HSN Code?
HSN stands for Harmonised System of Nomenclature. It is a product classification system maintained by the World Customs Organization (WCO) and used in over 200 countries. India uses it under GST to tie each product to a tax rate.
Only goods get HSN codes. Services use a different system called SAC (Services Accounting Code). When you sell a product, the HSN code on the invoice tells the tax department which GST rate applies to that product. The code does not set the rate by itself — the rate comes from the GST rate notification for that heading. But a wrong code can put your product under the wrong heading, and then the wrong rate follows.
How an HSN Code Is Built: 2, 4, 6 and 8 Digits
The HSN system has 21 sections and 97 chapters. The digits work like a family tree — each extra pair narrows the product down:
| Digits | Level | Example |
|---|---|---|
| 2 | Chapter — broad group | 85 — Electrical machinery |
| 4 | Heading — product type | 8517 — Telephone sets, including smartphones |
| 6 | Sub-heading — more detail | 851712 — Smartphones |
| 8 | Tariff item — exact description | Full 8-digit entry in the CBIC tariff, used for customs and exports |
For day-to-day GST invoicing you mostly work with the 4-digit or 6-digit level. The 8-digit level matters for imports, exports and customs paperwork.
How Many Digits Must Your Invoice Show?
The rule follows your aggregate turnover in the preceding financial year — not the current one. So for FY 2026-27 invoices, you look at your FY 2025-26 turnover.
| Turnover in preceding FY | Digits required | Where |
|---|---|---|
| Up to ₹5 crore | 4 digits | B2B invoices (mandatory); B2C invoices (optional) |
| Above ₹5 crore | 6 digits | Every invoice, B2B and B2C |
| Exports / imports | 8 digits | Shipping bills and customs documents |
This is a common trip-up: a business that crossed ₹5 crore last year must use 6-digit codes from the start of this year, even if this year’s sales are slow so far. The same bands apply to SAC codes for services — 4 digits up to ₹5 crore, 6 digits above it.
How to Find the Right HSN Code: 4 Steps
1. Search the GST portal
Go to the GST portal, log in, and open Services → User Services → Search HSN Code. Type a few words that describe your product — its technical name, not the brand name. For example, search “cotton T-shirt” rather than a brand name. Pick the entry whose description matches your product most closely.
2. Check the CBIC tariff
The Central Board of Indirect Taxes and Customs (CBIC) publishes the full tariff with 8-digit entries. Use it when you need the exact tariff-item description, for example for an export shipment.
3. Look at your supplier’s invoice
If you buy the product from a registered dealer, their invoice already carries an HSN code. You can usually use the same one — but verify it yourself. Suppliers sometimes use a broad code out of habit, and their mistake becomes yours if you copy it.
4. Apply the most-specific-description rule
When two codes could fit, use the one that describes your product most exactly. If you sell cotton T-shirts, use the code for cotton T-shirts (610910), not a generic code for clothing. Do not pick a broader code to reach a lower rate — that is misclassification, and it is one of the first things an audit checks.
Common HSN Codes and GST Rates (2026)
Rates below reflect GST 2.0, in force from 22 September 2025. The main slabs are now 5% and 18%, with a 40% de-merit slab for a small set of goods, plus special rates such as 3% on jewellery and nil on a few essentials. Always re-check the rate on the GST portal or CBIC site before you issue an invoice for a new product — rates change, and this table is a starting point, not the law.
| Product | HSN | GST rate (2026) |
|---|---|---|
| Smartphones | 851712 | 18% |
| Mobile phone chargers / adapters | 850440 | 18% |
| Headphones / earphones | 851830 | 18% |
| Washing machines (fully automatic) | 845011 | 18% |
| Air conditioners (window / wall type) | 841510 | 18% |
| TV sets | 852872 | 18% |
| Computer keyboards | 847160 | 18% |
| Motor vehicle parts (other) | 870899 | 18% |
| Plastic bottles | 392330 | 18% |
| Portland cement (other) | 252329 | 18% |
| Cotton T-shirts | 610910 | 5% up to ₹2,500 per piece; 18% above |
| Knitted shirts | 6105 | 5% up to ₹2,500 per piece; 18% above |
| Gold / precious-metal jewellery | 711319 | 3% |
| Medicines | 3004 | 5% (33 specified life-saving drugs are nil-rated) |
| Printed books | 4901 | Nil |
| Fresh milk (other than UHT) | 0401 | Nil |
| UHT milk | 0401 | 5% |
| Rice, unpackaged | 1006 | Nil |
| Rice, pre-packaged and labelled | 100630 | 5% |
Notice how the same first digits can carry different rates: fresh milk and UHT milk both sit in heading 0401, but one is nil-rated and the other is 5%. The description matters, not just the chapter. The same is true for rice — loose rice is nil-rated, while pre-packaged labelled rice is 5%.
HSN vs SAC: What’s the Difference?
| Feature | HSN (goods) | SAC (services) |
|---|---|---|
| Used for | Physical products | Services |
| Digits | 2, 4, 6 or 8 | 6 digits (for example, 998311 for management consulting) |
| Example | 851712 — Smartphones | 998311 — Management consulting services |
| Where to find | GST portal HSN search, CBIC tariff | GST portal SAC search, GST rate schedule |
If you sell both goods and services — a common case for freelancers who sell a laptop with an installation service, for example — each line of the invoice carries its own code: HSN for the goods line, SAC for the service line. Our guide to SAC codes for consultants and freelancers covers the 9983 family in detail.
What Happens If You Use the Wrong HSN Code?
A wrong code is not a small typo. It can cause four real problems:
- Wrong tax. You may charge too little tax and owe the difference plus interest, or charge too much and face unhappy buyers and refund claims.
- ITC mismatch. If the code on your supplier’s invoice and yours do not line up, input tax credit can get stuck in reconciliation.
- GSTR-1 Table 12 errors. Table 12 is where HSN-wise summaries are reported. A wrong code here means your return does not match your invoices, and you may need to correct it through GSTR-1A before filing GSTR-3B. See our GSTR-1 vs GSTR-3B guide for how the two returns connect.
- Penalty. Wrong invoicing can attract a general penalty of up to ₹25,000 under each of the CGST and SGST Acts (Section 125). If the wrong code also led to short payment of tax, the tax difference plus interest applies on top.
5 Common Mistakes and How to Avoid Them
- Still using 4 digits after crossing ₹5 crore. Check last year’s turnover at the start of every financial year and update your invoice template.
- Picking a broad code to get a lower rate. Follow the most-specific-description rule. A lower rate from the wrong code is not a saving — it is a demand notice waiting to happen.
- Copying the supplier’s code without checking. Verify it against your own product description on the GST portal.
- Leaving HSN blank on B2C invoices above ₹5 crore. Above the threshold, the code is required on every invoice, B2B and B2C.
- Using pre-September 2025 rates. GST 2.0 moved many goods — air conditioners, TVs and washing machines among them — from 28% to 18%. If your billing software still shows 28% for these, update it.
What Changed and What Stayed the Same
Changed: From 22 September 2025, the GST slabs are 5% and 18% (plus 40% de-merit and special rates like 3% on jewellery). Many goods that were at 12% or 28% moved down. From the May 2025 return period, GSTR-1 Table 12 reporting moved to Phase 3: the table is split into B2B and B2C sections, you pick HSN/SAC from the portal’s dropdown master instead of typing free text, and the portal validates the minimum digit length against your turnover.
Stayed the same: The HSN system itself, the 4-digit / 6-digit turnover rule, and the need to classify each product by its most specific description. The turnover test still looks at the preceding financial year.
Frequently Asked Questions
What is an HSN code in GST?
It is a numeric code that classifies goods under the international Harmonised System. In GST it links each product to the rate notification for its heading, so the right tax is charged on the invoice.
How do I find the HSN code for my product?
Use the GST portal (Services → User Services → Search HSN Code) and search by the product’s technical description. Cross-check against the CBIC tariff for 8-digit detail, and check your supplier’s invoice as a second source — but verify it yourself before you use it.
Is an HSN code mandatory for all businesses?
For registered businesses selling goods, yes, with the digit rule based on turnover. Up to ₹5 crore in the preceding year, a 4-digit code is mandatory on B2B invoices and optional on B2C invoices. Above ₹5 crore, a 6-digit code is mandatory on every invoice.
How many digits of HSN code are required?
Up to ₹5 crore turnover: 4 digits (B2C optional). Above ₹5 crore: 6 digits on all invoices. Exports and imports: 8 digits on shipping bills and customs documents.
What is the difference between HSN and SAC codes?
HSN is for goods and can run to 2, 4, 6 or 8 digits. SAC is for services and is 6 digits. Goods lines on an invoice carry HSN; service lines carry SAC.
What happens if I use the wrong HSN code?
You may charge the wrong tax and owe the difference with interest, your input tax credit can get stuck, your GSTR-1 Table 12 summary will not match your invoices, and a general penalty of up to ₹25,000 under each of the CGST and SGST Acts can apply.
Do I need an HSN code on B2C invoices?
Above ₹5 crore turnover in the preceding year, yes — on every invoice, B2B or B2C. At or below ₹5 crore, it is optional on B2C invoices, though showing it is still good practice.
Official Sources
- GST Portal — gst.gov.in (HSN search, returns, Table 12)
- CBIC — cbic.gov.in (Customs and GST tariff, rate notifications)
- GST Services — services.gst.gov.in (Login services including HSN search)
Reviewed by Asuthod Rathod, CA. Last updated: 17 October 2026.
Disclaimer: This article is general information, not tax advice. GST rates and HSN entries change through notifications — verify the current rate for your exact product on the GST portal or CBIC site, or ask your CA, before filing or invoicing.
Related guides
- GSTR-3B Due Date October 2026: September Return on 20 Oct, QRMP on 22/24 Oct, and the Dussehra Point
- GSTR-1 vs GSTR-3B: What’s the Difference and Which One Do You File?
- SAC Codes for Consultants & Freelancers in India (2026)
Editorial byline for eircicai GST guides — covering registration, return filing, rates, and compliance for small businesses. Content is reviewed by Asuthod Rathod, CA.