HSN Code Finder

HSN stands for Harmonized System of Nomenclature, a globally standardized system developed by the World Customs Organization for classifying goods. It uses a 6-digit code to categorize products into chapters, headings, and subheadings based on their nature, composition, and use. India adopted HSN for GST to bring uniformity in product classification and tax rates. Under the GST regime, HSN codes serve multiple purposes. First, they determine the applicable GST rate for a product. Different products have different tax rates—essential goods might be at 0% or 5%, while luxury items could be at 28%. The HSN code tells you which rate applies. Second, HSN codes are mandatory on tax invoices for businesses above certain turnover thresholds, ensuring transparency and compliance. Third, they help the government track which products are being traded, analyze tax collections, and formulate policies. For businesses, HSN codes are crucial for issuing GST-compliant invoices. When you sell goods, your tax invoice must mention the HSN code (subject to turnover thresholds). This allows your customers (especially B2B buyers) to claim input tax credit correctly. It also helps during GST filing—when you upload sales data to the GST portal, HSN codes are required for certain return formats. Incorrect or missing HSN codes can cause several problems. Your invoices might be rejected by customers, ITC claims could be denied, GST returns might be flagged for errors, and audits could result in penalties. Additionally, using the wrong HSN code might mean you're charging the wrong GST rate, leading to underpayment or overpayment of taxes. For small businesses, the HSN requirement depends on turnover. If your turnover is up to ₹1.5 crores, you only need 2-digit HSN codes. Between ₹1.5 crores and ₹5 crores, 4-digit codes are required. Above ₹5 crores, you must use 6-digit or more detailed codes. Even if you're below the threshold, using HSN codes is good practice—it makes your invoices more professional and prepares you for growth. HSN codes are also used for exports and imports, where they help determine customs duties, IGST rates, and eligibility for trade benefits. Internationally recognized, HSN ensures that your products are classified consistently across borders, simplifying global trade. In summary, HSN codes are the backbone of GST compliance. They classify your products, determine tax rates, enable accurate invoicing, and help both businesses and the government maintain transparent, efficient tax systems.

Whether HSN codes are mandatory on your GST invoices depends on your annual turnover and the type of transaction. The GST rules specify different HSN code requirements based on business size to balance compliance with ease of doing business for small enterprises. If your aggregate turnover is up to ₹1.5 crores, you are required to mention only 2-digit HSN codes on your invoices. This is a relaxed requirement recognizing that very small businesses may not have sophisticated accounting systems. Two-digit codes represent the chapter level—for example, "84" for machinery, "61" for knitted apparel, or "09" for coffee, tea, and spices. This broad classification is enough for small-scale compliance. For businesses with turnover between ₹1.5 crores and ₹5 crores, 4-digit HSN codes are mandatory. Four-digit codes provide more specificity—for instance, "8471" for computers, "6109" for t-shirts, or "0901" for coffee. This level of detail helps the GST system track product categories more accurately while still being manageable for mid-sized businesses. If your turnover exceeds ₹5 crores, you must use at least 4-digit HSN codes, though 6-digit codes are encouraged for better classification. Some businesses voluntarily use 6 or 8-digit codes (especially in manufacturing or exports) for precision and international alignment. These turnover thresholds apply to your aggregate turnover across all your GSTINs in India (if you have multiple registrations). It's not calculated per state or per location—it's your total business turnover for the financial year. There are also specific exemptions. Certain taxpayers under the composition scheme or suppliers of exempt goods may not be required to mention HSN codes on every invoice, though they should still track them internally for record-keeping and filing purposes. For B2B invoices (sales to registered businesses), HSN codes are especially important because they affect the buyer's input tax credit claim. Even if you're technically not required to mention HSN codes due to low turnover, doing so adds credibility and helps your business clients. For exports, HSN codes are always mandatory regardless of turnover because they're required on shipping bills and customs declarations. Export incentives, duty drawbacks, and GST refunds depend on accurate HSN classification, so exporters must use detailed codes from the start. One thing to note: the rules can change. GST notifications are periodically updated, and HSN requirements might be revised. It's important to stay updated through official GST circulars or consult with your CA to ensure you're meeting current compliance standards. In practice, most businesses above the exemption threshold include HSN codes on all their invoices, even for B2C sales. It's simpler to have a standard invoice format than to create different formats based on customer type. Plus, it future-proofs your business—if your turnover grows, you're already compliant.

The number of HSN code digits required on your GST invoices depends on your annual aggregate turnover. The GST law prescribes different levels of detail based on business size, balancing compliance needs with administrative ease. For businesses with turnover up to ₹1.5 crores, only 2-digit HSN codes are required. Two digits represent the chapter level of classification. For example, Chapter 84 covers machinery, Chapter 61 covers knitted apparel, and Chapter 30 covers pharmaceutical products. This broad classification is sufficient for very small businesses and reduces their compliance burden. For turnover between ₹1.5 crores and ₹5 crores, 4-digit HSN codes are mandatory. Four digits provide the heading level. For instance, HSN 8471 specifically refers to automatic data processing machines (computers), while HSN 8473 covers parts and accessories of those machines. This level of detail allows better tracking of product categories without overwhelming mid-sized businesses. For businesses with turnover above ₹5 crores, at least 4-digit codes are required, but 6-digit codes are often used and encouraged. Six digits represent the subheading level and offer international alignment, as the 6-digit HSN system is used globally. For example, HSN 847130 refers to portable computers (laptops), while 847141 refers to other computers containing a processor and input/output units. In practice, many larger businesses use 6-digit codes even when 4-digit codes would suffice, especially if they export goods (where 6-digit or 8-digit codes are standard), deal with government tenders, or have sophisticated inventory management systems that benefit from detailed classification. Eight-digit codes are used in customs and international trade, where the additional digits represent country-specific classifications. For domestic GST purposes, 8-digit codes are not mandatory, but exporters and importers often use them to align their documentation across customs and GST. It's important to note that "aggregate turnover" means your total turnover across India, including all your business locations and GSTINs, not just turnover in one state. If you have multiple registrations and your combined turnover crosses ₹1.5 crores or ₹5 crores, the higher HSN digit requirement applies to all your invoices, regardless of which state or location issued them. Also, the turnover threshold is calculated based on the previous financial year. So if your turnover in FY 2024-25 exceeded ₹1.5 crores, you should use 4-digit codes starting from FY 2025-26. If you're a new business, you estimate your likely turnover and apply the appropriate HSN digit requirement from the start, adjusting if necessary as the year progresses. One practical tip: even if you're eligible to use 2-digit codes, consider using 4-digit codes voluntarily. They're not much more complicated, they make your invoices look more professional, and they help you stay compliant as your business grows without needing to overhaul your invoicing system later. Finally, remember that using fewer digits than required is a compliance violation that can be flagged during GST audits. Using more digits than required is fine and often better—it shows diligence and attention to detail.

In theory, each product should have one specific HSN code that best describes its nature, composition, and use. However, in practice, certain products can be classified under multiple HSN codes depending on interpretation, context, or specific characteristics. This ambiguity is one of the challenges businesses face when classifying goods for GST. Let's take an example: a plastic storage box. It could be classified under HSN 3924 (tableware, kitchenware, and household articles of plastics) if it's intended for kitchen or household use. But it could also fall under HSN 3926 (other articles of plastics) if it's a general-purpose storage container. The distinction depends on how the product is marketed, its design, and its intended use. Another example: a laptop bag. Is it HSN 4202 (trunks, suitcases, and cases of leather or other materials), or is it HSN 6307 (textile-made articles)? If the bag is primarily made of leather or synthetic material with textile lining, 4202 seems appropriate. But if it's a predominantly textile product, 6307 might fit. The material composition and construction determine the correct classification. Such ambiguities often arise for: - Multi-use products (items that serve several purposes) - Composite goods (products made from multiple materials) - New or innovative products (items that didn't exist when the HSN system was designed) - Borderline cases (where features could logically fit multiple categories) When facing such situations, businesses should consider: 1. Primary function: What is the product mainly used for? 2. Material composition: What is it predominantly made from? 3. Industry practice: What HSN code do similar products in the market use? 4. GST rate: Which classification results in the correct tax rate for this type of product? It's important to note that using inconsistent HSN codes for the same product across different invoices is problematic. Once you choose an HSN code for a product, stick with it unless there's a valid reason to change (like a product redesign or official reclassification). Consistency is key for audit defense and GST compliance. If you're genuinely unsure and multiple codes seem valid, the safest approach is to: - Check the official GST HSN explanatory notes - Consult with your chartered accountant - Look for clarifications issued by the GST Council or CBIC - Apply the principle of most specific classification (use the code that most closely describes the product) There's also a general interpretive rule (GIR) in the HSN system that helps resolve ambiguities. For instance, when a product could fit multiple headings, the heading that provides the most specific description takes precedence over more general headings. From a practical standpoint, it's better to choose one defensible HSN code and document your reasoning than to keep switching codes. During audits, authorities appreciate businesses that can justify their classification choices with clear logic, even if alternative classifications were technically possible. Lastly, remember that for GST purposes, what matters most is applying the correct tax rate. If two possible HSN codes for your product both have the same GST rate (say, 18%), the difference is less critical than if they have different rates (like 5% vs. 18%). However, even when rates match, consistent classification is best for clean records.

Using an incorrect HSN code on your GST invoices can lead to several consequences ranging from minor administrative hassles to serious compliance issues, depending on the nature and extent of the error. Understanding the potential impacts helps you appreciate why accurate HSN classification matters. First, consider the GST rate implication. If you use an HSN code that corresponds to a different GST rate than what actually applies to your product, you might charge incorrect tax. For example, if your product should be taxed at 12% (HSN 6404 for certain footwear) but you mistakenly use an HSN code that attracts 18% (HSN 6405 for different footwear), you're overcharging your customer. Conversely, if you undercharge, you're underpaying tax to the government. When you overcharge GST, customers (especially B2B buyers) will notice the discrepancy when they try to claim input tax credit. They might reject your invoice and demand a corrected version with the right HSN code and tax amount. This delays payments and damages your business relationships. When you undercharge GST due to a wrong HSN code, the problem is more serious. The GST department can issue a demand notice asking you to pay the short-paid tax, along with interest and potential penalties. If they determine the error was intentional (tax evasion), penalties can be severe—up to 100% of the tax amount in some cases. Even if the GST rate is coincidentally the same for both the correct and incorrect HSN codes, using the wrong code still creates compliance issues. During GST filing, your return data (GSTR-1, GSTR-3B) might show inconsistencies. The GST portal's auto-validation systems flag mismatched or unusual HSN codes, which can delay return processing or trigger scrutiny. For your customers (B2B buyers), an incorrect HSN code on their purchase invoice affects their ITC claim. When they file their returns and try to claim credit, the tax authorities might question why a particular product has an unusual HSN code. If the buyer's ITC claim is denied or delayed because of errors in your invoice, they'll hold you responsible and might stop doing business with you. During GST audits or assessments, authorities specifically check whether HSN codes on invoices match the nature of your business and products. A hardware store's invoices showing HSN codes for cosmetics, or a textile manufacturer showing codes for electronics, will immediately raise red flags. Auditors might interpret such discrepancies as signs of poor record-keeping, lack of systems, or even intentional misreporting. If the error is caught early (within the same financial year or the correction window allowed by GST rules), you can issue a revised invoice or a debit/credit note correcting the HSN code and any associated tax discrepancy. You'll also need to reflect this correction in your GST returns for the relevant period. While this is administratively tedious, it's better than leaving errors uncorrected. For businesses with recurring customers, correcting past invoices might require cooperation from the buyer, especially if they've already used the invoice for ITC claims. Reissuing hundreds of invoices retrospectively is impractical, which is why preventing errors upfront is so important. From a practical standpoint, the best defense against wrong HSN code issues is diligence: - Research and verify HSN codes before using them on invoices - Maintain a master list of products with their correct HSN codes - Train your invoicing staff on the importance of accurate classification - Periodically review invoices to catch and correct errors early - Consult with a CA when classifying new or ambiguous products If you discover historical errors, consult your CA immediately. Depending on the situation, you might need to file revised returns, issue corrected invoices, or make voluntary disclosures to the GST department. Proactive correction is always better than waiting for authorities to discover the mistake. In summary, choosing the wrong HSN code can result in incorrect tax charges, disrupted customer relationships, ITC complications, compliance penalties, and audit troubles. Accuracy and consistency in HSN classification protect you from these risks and demonstrate professionalism in your business operations.

GST rates are generally associated with specific HSN codes, but the relationship isn't always one-to-one or permanent. While most HSN codes have a standard GST rate (0%, 5%, 12%, 18%, or 28%), there are nuances, exceptions, and occasional changes that businesses must be aware of. For the majority of products, a given HSN code corresponds to a specific GST rate. For example, HSN 1006 (rice) is taxed at 0%, HSN 8471 (computers) at 18%, and HSN 8703 (motor cars) at 28%. This standardization simplifies taxation and ensures uniformity across the country—a product taxed at 18% in Maharashtra is also taxed at 18% in Tamil Nadu. However, complications arise in several scenarios. First, some HSN codes cover a broad range of products with different GST rates depending on additional criteria. For instance, footwear (HSN 6401-6405) has different rates based on the retail sale price—footwear sold up to ₹1,000 per pair is taxed at 5%, while footwear above ₹1,000 is taxed at 18%. The HSN code alone doesn't tell you the rate; you also need to know the price threshold. Similarly, textiles and garments have rate variations based on material, value, and type. Ready-made garments up to ₹1,000 per piece are taxed at 5%, while those above ₹1,000 are taxed at 12%. Cotton fabrics might be at 5%, but embroidered or branded fabrics could be higher. The HSN code provides the category, but the rate depends on additional factors. Second, certain products within the same HSN code can have different rates if they fall under specific descriptions or notifications. For example, some food preparations (HSN 2106) might be taxed at 12% if they're certain types of ready-to-eat foods, while others under the same HSN code might be at 18% if they're different preparations. You have to read the GST rate schedules carefully to identify which description matches your product. Third, GST rates are not static. The GST Council meets periodically and can revise rates for specific products. Over the years since GST's introduction in 2017, rates for several items have been increased, decreased, or restructured. For instance, some items initially taxed at 28% were later moved to 18% to reduce the burden on consumers. Businesses need to stay updated with GST Council decisions and notification amendments to ensure they're applying current rates. Fourth, certain products attract additional cesses on top of the GST rate. Luxury goods, tobacco products, and certain automobiles have compensation cess in addition to the base GST rate (28% + cess). This cess is not technically part of the GST rate but is still tax liability linked to the HSN classification. Fifth, exemptions and concessions exist for specific products, sectors, or situations. For example, some products are exempt from GST (0% rate) under specific conditions—like agricultural produce, certain educational materials, or healthcare items. The exemption might apply only to specific product types within an HSN chapter or only when supplied by certain entities (like unprocessed food vs. processed food). For businesses, this means you cannot simply memorize that "HSN 8471 is 18%"—you must verify the current rate, check for any conditions or thresholds, and ensure your product specifically matches the description for that rate. This is where official GST rate schedules, notifications, and professional advice become essential. HSN code finder tools often display GST rates as indicative or approximate (like "18%" or "5% / 12%") because the actual rate depends on additional details. These tools are helpful starting points, but you should always cross-check with the official GST rate schedule or consult your CA before finalizing your invoices. One practical approach: maintain a product master list that includes not just HSN codes but also the applicable GST rates for your specific products, updated regularly. Whenever the GST Council announces rate changes, review your list and update it accordingly. This proactive approach ensures your invoicing is always accurate and compliant.

HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Code) are both classification systems used under GST in India, but they serve different purposes. HSN is for goods, and SAC is for services. Understanding the distinction is important because businesses often deal with both, and invoices must correctly classify whether you're supplying goods or services. HSN codes classify tangible goods—physical products you can touch, see, and ship. Examples include rice (HSN 1006), computers (HSN 8471), clothing (HSN 6109), furniture (HSN 9403), and vehicles (HSN 8703). HSN is a globally recognized system used by customs authorities and tax departments worldwide, making it useful for international trade as well as domestic taxation. SAC codes classify services—intangible activities or work performed for customers. Examples include legal services (SAC 998211), consulting services (SAC 998313), repair services (SAC 998722), and transportation services (SAC 996411). SAC is specific to India's GST framework and was developed to categorize services for tax purposes. The structure of the codes also differs slightly. HSN codes use a hierarchical system with 2, 4, 6, or 8 digits representing chapters, headings, and subheadings. SAC codes are typically 6 digits and follow a similar but distinct categorization framework. For example, SAC codes starting with "99" represent services, while HSN codes cover a wider range from "01" (live animals) to "99" (miscellaneous). On invoices, you use HSN codes when selling goods and SAC codes when providing services. For example: - If you sell laptops, use HSN 8471 - If you provide IT consulting services, use SAC 998313 - If you sell and install air conditioners, you'd use both—HSN for the goods (air conditioner unit) and SAC for the installation service Some businesses provide composite supplies, where goods and services are bundled together. For example, a restaurant serves food (goods) but also provides dining service (service). In such cases, GST rules define whether the supply is treated as goods or services based on the "principal supply." For restaurants, it's treated as a service, so SAC codes are used. But if you're a caterer selling packaged food for takeaway, it might be treated as goods with HSN codes. Another scenario is works contracts (construction, fabrication, etc.), where materials (goods) and labor (services) are involved. GST law treats works contracts as services, so SAC codes apply. However, for record-keeping, businesses often track both the goods supplied and the services rendered separately. The GST rate structure for services (SAC) can differ from goods (HSN), even if the industry or activity is similar. For example, selling a book (HSN 4901) might attract 0% or 5% GST, while providing a book printing service (SAC 998916) might attract 12% or 18% GST. The classification matters because it determines your tax liability and pricing. For businesses that deal with both goods and services, maintaining separate classification lists is useful—one for HSN codes (products you sell) and one for SAC codes (services you provide). This clarity ensures your invoices are correct and your GST returns separate goods and services appropriately. From a compliance perspective, the rules for mentioning HSN and SAC codes on invoices are similar—they depend on turnover thresholds. Services above certain turnover limits require SAC codes on invoices, just like goods require HSN codes. One important point: when dealing with imports and exports, HSN is predominantly used because it's the international standard for goods classification. Services trade internationally also uses different systems (like the WTO's CPC classification), though for domestic Indian GST, SAC codes apply to services. If you're unsure whether your supply is goods or services, consult GST definitions and legal precedents. Misclassifying goods as services (or vice versa) can lead to wrong tax rates, incorrect ITC claims, and compliance issues. When in doubt, seek professional advice from a CA or GST practitioner.

HSN codes themselves—the structure, chapters, and headings—are relatively stable because they're maintained by the World Customs Organization (WCO) at the international level. Major revisions to the HSN system happen approximately every five years through a global consultation process. However, for businesses, the more frequent changes come from GST rate adjustments and clarifications issued by the Indian GST Council, which can affect how you use HSN codes. The WCO last updated the HSN system in 2022 (HSN 2022 version), with changes reflecting new products, technologies, and trade patterns. For example, new codes were added for emerging products like electric vehicles, drones, and certain pharmaceuticals. India generally adopts these international updates, but implementation takes time, and not all changes immediately affect GST classification. More relevant for Indian businesses are the periodic updates to GST rates and HSN code requirements. The GST Council (comprising central and state finance ministers) meets several times a year and can: - Change GST rates for specific products - Reclassify products under different HSN codes - Add exemptions or special rates for certain items - Clarify which HSN code applies to ambiguous products When the GST Council makes such decisions, they're formalized through official GST notifications issued by the Central Board of Indirect Taxes and Customs (CBIC). These notifications are legally binding and specify the exact date from which changes take effect. Businesses are expected to implement changes from the effective date, updating their invoicing, pricing, and accounting accordingly. To stay updated with HSN code and GST rate changes, follow these practices: 1. **Subscribe to official sources**: Regularly check the CBIC website (cbic.gov.in) for notifications and circulars. The GST portal (gst.gov.in) also publishes updates, FAQs, and clarifications. 2. **Follow GST Council announcements**: After each GST Council meeting, press releases summarize key decisions. Major changes are widely covered in business news, but official notifications provide the detailed legal text. 3. **Consult with your CA or tax advisor**: Chartered accountants and GST practitioners track regulatory changes professionally and can advise how they apply to your specific business. Periodic consultations (quarterly or annually) help ensure you're compliant with the latest rules. 4. **Use updated compliance software**: If you use GST accounting software or ERP systems, ensure they're updated regularly. Reputable software providers update their systems with new tax rates, HSN codes, and compliance rules whenever changes are notified. 5. **Join industry associations or business groups**: Trade associations often circulate updates relevant to specific sectors. Being part of these networks keeps you informed about changes affecting your industry. 6. **Review your HSN codes periodically**: Even if there are no major regulatory changes, it's good practice to review your product classifications annually. Business changes (new products, changing suppliers, product redesigns) might require HSN code updates. From a practical standpoint, HSN codes for most common products remain stable for years. If you sell rice (HSN 1006), wheat (HSN 1001), or computers (HSN 8471), those codes are unlikely to change. What might change is the GST rate applied to those codes or the introduction of thresholds and conditions. However, if you deal with niche products, newly developed items, or goods in rapidly evolving industries (like technology, pharmaceuticals, or renewable energy), you should be more vigilant. New products might not have clear HSN classifications initially, and clarifications or new codes might be issued as the market evolves. One risk businesses face is the gap between when a change is announced and when it's implemented. Sometimes the GST Council announces a decision in a meeting, but the official notification is published weeks later. During this period, businesses might be uncertain how to comply. In such cases, it's safer to continue with existing practices until the official notification clarifies the exact change and effective date. Another consideration: retrospective changes. Occasionally, GST rate changes or clarifications are made effective from a past date (retroactive application). While this is rare and generally avoided, it can happen. Staying updated helps you anticipate and respond to such situations quickly, minimizing compliance risks. In summary, while the core HSN code structure is stable, the GST rates, conditions, and interpretations can change periodically. Staying informed through official channels, professional advice, and periodic reviews ensures your business remains compliant and avoids surprises during audits or customer interactions.