What is an HSN code?
An HSN code is an internationally standardised number that classifies goods for customs and tax purposes. It is hierarchical: the first two digits give the chapter, four digits the heading, six the internationally agreed subheading, and eight the national tariff line used in India. Under GST the code determines the rate that applies, and how many digits an invoice must carry depends on the supplier’s turnover.
The hierarchy
Classification moves from general to specific. Chapter 72 is iron and steel; heading 7214 is bars and rods of iron or non-alloy steel, hot-rolled; the following digits narrow it further. You classify downwards, never by searching for a product name.
Why the rate follows it
GST rates are notified against classifications rather than against product names, so choosing the code chooses the rate. An incorrect classification usually means an incorrect rate, with exposure running back over every invoice raised under it.
Goods only
Services use SAC codes, a separate list with its own structure. Putting an HSN code on a service line is a routine error worth catching at the item master.
Related questions
How many HSN digits do I need on my invoice?
It depends on your aggregate turnover band, and the requirement has been tightened more than once since 2017. Check the current notification rather than relying on how your software was set up.
What happens if I use the wrong HSN code?
The rate generally follows the classification, so a wrong code frequently means the wrong tax charged — and the exposure covers every invoice issued under it, not just the next one.
Is there an official list?
Yes, in the Customs Tariff and the GST rate notifications. Search tools are useful for orientation but the tariff is the authority.
More definitions
Find the chapter, then the heading
Our free HSN finder searches chapters and common headings by material and product.