HSN Code

HSN (Harmonized System of Nomenclature) is an internationally standardised system of codes used to classify goods for taxation. Developed by the World Customs Organization (WCO), it is adopted by over 200 countries and forms the basis for classifying goods under India's GST and Customs regimes. Each product is assigned a code so that the correct GST rate and tariff can be applied uniformly across the country.

How the code is structured

The global HSN uses a 6-digit code built up in layers: the first 2 digits denote the chapter, the next 2 the heading, and the last 2 the sub-heading. India extends this to 8 digits under the Customs Tariff Act, 1975, adding a further 2-digit tariff item for finer classification. The system spans 21 sections and 99 chapters.

Reporting requirements under GST

The number of digits a taxpayer must quote on invoices and in Table 12 of GSTR-1 depends on aggregate annual turnover (AATO) in the preceding financial year, per Notification 78/2020 – Central Tax (effective 1 April 2021):

AATO (previous FY)	Minimum HSN digits
Up to Rs 5 crore	4 digits (mandatory for B2B; optional for B2C)
Above Rs 5 crore	6 digits
Imports / exports	8 digits

From the May 2025 return period, HSN codes in Table 12 must be picked from a dropdown rather than typed manually. Services are classified separately using SAC codes. CBIC administers these rules.