HSN › HSN vs SAC

HSN and SAC codes: what is the difference?

Every line on a GST tax invoice carries a classification code. Goods use an HSN code, services use a SAC code. Both tell the tax officer, and your buyer's accountant, exactly what was sold.

HSN: for goods

HSN (Harmonized System of Nomenclature) is the world customs list of goods. India uses it for GST and customs. It is built in steps:

Digits	Level	Example	Meaning
2	Chapter	61	Knitted clothing
4	Heading	6109	T-shirts and vests, knitted
6	Subheading	610910	Of cotton
8	Indian tariff item	61091000	The full Indian code

There are 21 sections and chapters 1 to 97 (chapter 77 is kept empty). India adds chapter 98 for special cases such as project imports and baggage.

SAC: for services

SAC (Services Accounting Code) is India's list of services under GST. Every SAC starts with 99. The first 4 digits are the heading, for example 9987 maintenance and repair services, and the full code has 6 digits, for example 998714. The SAC heading list shows all headings.

Which one goes on your bill

You sell goods: HSN. A shop selling cotton T-shirts writes a 6109 code.
You give a service: SAC. A mechanic repairing machines writes a 9987 code.
Both on one bill: each line gets its own code. Spare parts sold with a repair are goods (HSN); the labour is a service (SAC).
How many digits: it depends on your turnover; see HSN code on an invoice.

Common mix-ups

Job work on someone else's goods is a service (SAC 9988), even though you work on goods.
Restaurant food is a service (SAC 9963), while packed food sold in a shop is goods (HSN).
Renting a vehicle, machine or room is a service, not a sale of goods.

The code decides the GST rate, so pick it carefully. When in doubt, look at your supplier's invoice for the same goods, search the GST portal, or ask your accountant.

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