HSN Code (Harmonized System of Nomenclature)

An HSN code (Harmonized System of Nomenclature) is a numeric product classification developed by the World Customs Organization and used by more than 200 countries to identify traded goods. The international system is six digits; countries add more digits for their own needs, and India uses up to eight.

Why it matters

A product's HSN code determines which tax rate and customs duty apply, so every seller needs to classify goods consistently. Under India's GST, tax invoices must carry an HSN code, and the number of digits required depends on the seller's turnover and current rules. Services use a separate code called SAC. Accounting and e-commerce tools often store the code per product alongside the SKU.

Example

Product:     Cotton T-shirt, knitted
HSN (6-digit): 6109.10
Line item:   1000 units, GST rate per notified schedule

The first two digits identify the chapter (61, knitted apparel), the next two the heading, and the following two the subheading. The applicable tax rate is looked up from the government's schedule, not derived from the code itself.

Common mistakes

• Picking a code by guesswork or by copying a competitor. Wrong classification can cause the wrong rate.
• Assuming codes never change. Schedules are amended.
• Using an HSN code for a service, where a SAC code applies.

Rules vary by country; this entry is a definition only and not tax advice.

Related

• GST
• GSTIN
• SKU
• Invoice

This page is general information written by our editorial team and updated when documentation changes. Servers and providers differ, so test changes safely first. See our editorial policy and disclaimer.