HSN is a 6/8-digit code for goods under GST; SAC is a 6-digit code for services under GST. They are governed under the same Act but apply to different categories.
The Harmonized System of Nomenclature (HSN) and the Services Accounting Code (SAC) are the two parallel classification systems used on GST tax invoices in India. Both were notified under the CGST Act, 2017 and the CBIC maintains the official code lists. HSN classifies goods — every supply of tangible, movable goods — using 6-digit codes (with an optional 8-digit national extension for domestic tracking). SAC classifies services — every supply of intangible or non-goods activity — using 6-digit codes maintained by CBIC. Both codes are mandatory on GST invoices (GSTR-1 and GSTR-3B), and using the wrong code triggers mismatches in GSTR-2B reconciliation and GST officer queries. Businesses with turnover above Rs.5 crore must declare the 6-digit HSN on invoices; businesses below this threshold may use a 4-digit chapter-level code. The same 6-digit structure applies to SAC for services.
The 10 most-searched SAC codes for GST are:
- 999921 - Legal services. Covers advocates, solicitors, and court fees for litigation, arbitration, and consultancy on legal affairs.
- 998314 - IT services. Covers software development, programming, IT consulting, computer facilities management, and data processing.
- 998216 - Management consulting services. Covers business management advice, organisational planning, human resources, and strategic advisory.
- 998315 - Accounting and bookkeeping services. Covers preparation of financial records, audit support, tax return filing, and payroll services.
- 998313 - Research and development services. Covers scientific research, laboratory testing, product trials, and experimental development work.
- 998319 - Other professional services. Covers photography, translation, credit reporting, trade mediation, and miscellaneous expert services.
- 998411 - Fixed-line telecommunications. Covers PSTN landline services, leased circuits, and voice-over-internet telephone services.
- 998412 - Mobile telecommunications. Covers cellular voice, SMS, and data services for postpaid and prepaid mobile connections.
- 998611 - Support services for agriculture. Covers agricultural harvesting, pest control, soil preparation, and irrigation services.
- 998314 for IT-enabled services including BPO operations, call centre support, and back-office processing.
Examples
A cotton shirt sale is reported under HSN 6205; an advertising agency service falls under SAC 9983.
Frequently Asked Questions
What is the difference between HSN and SAC under GST?
HSN (Harmonized System of Nomenclature) classifies goods - tangible, movable products - under GST. SAC (Services Accounting Code) classifies services - intangible activities - under GST. Both use 6-digit codes and both are mandatory on GST tax invoices.
Which SAC code should I use for IT services?
Use SAC 998314 for IT services including software development, programming, IT consulting, and computer facilities management. For BPO or call centre services, also use 998314 under the IT-enabled services classification.
Is it mandatory to mention HSN and SAC on GST invoices?
Yes. Under the CGST Rules, every tax invoice must carry the HSN code for goods and SAC code for services. Businesses with turnover above Rs.5 crore must use at least 6-digit HSN codes; those below Rs.5 crore may use 4-digit chapter codes. SAC codes apply to all service suppliers registered under GST.
How do I find my correct SAC code?
CBIC publishes the official SAC list at cbic.gov.in. FinTax24 also maintains a searchable SAC code finder at /search-codes/sac-code-search/ where you can look up codes by service keyword. Enter your service activity to find the matching 6-digit SAC code.
What happens if I use the wrong HSN or SAC code on my invoice?
Using the wrong code creates mismatches in GSTR-2B reconciliation for your buyers. Repeated mismatches or a clearly wrong classification can trigger a GST officer query under Section 73 or 74 of the CGST Act, leading to demand notices, interest, and penalties.
Can I use the same HSN or SAC code for multiple products or services?
One HSN or SAC code applies to each line item on a GST invoice. Related products or services can share the same code if they fall under the same classification. For mixed supplies, you classify the dominant element. FinTax24 experts can help you apply the right codes.
