The Complete Guide to HSN & SAC Codes for Indian Invoicing in 2026

Why HSN and SAC Accuracy is Vital for Indian Businesses

The Harmonized System of Nomenclature (HSN) is an internationally standardized system of names and numbers to classify traded products, developed by the World Customs Organization (WCO). In India, the GST Council adopted the HSN classification for goods and introduced the Services Accounting Code (SAC) (Chapter 99) for services.

Quoting an incorrect HSN or SAC code can result in:

• Dispute over applicable GST rate (e.g. 5% vs 18%).
• Rejection of electronic e-invoices and E-Way Bills at transit checkpoints.
• General penalty under Section 125 of the CGST Act up to ₹50,000 (₹25,000 CGST + ₹25,000 SGST).

Turnover-Based Mandatory Digits (AATO Rules)

Under Notification No. 78/2020 – Central Tax, the minimum number of HSN digits required on tax invoices depends on the taxpayer's Aggregate Annual Turnover (AATO) in the preceding financial year:

HSN vs SAC: The Fundamental Chapter 99 Difference

• Goods (HSN): Span Chapters 01 to 98 (e.g. HSN 84713010 for Laptops and portable computers).
• Services (SAC): Always begin with the prefix 99 (e.g. SAC 998314 for Information technology design and development services, SAC 998222 for Accounting and auditing services).

Table 12 in GSTR-1: The End-of-Month Nightmare Solved

At the end of every tax period, GSTR-1 requires Table 12: a detailed summary grouping all items by HSN/SAC code, displaying total quantity, taxable value, and breakups of IGST, CGST, SGST, and Cess.

Manually grouping hundreds of invoice line items into Table 12 takes hours and leads to rounding discrepancies.

In kitebooks, our built-in auto-directory contains over 15,000+ Indian HSN and SAC codes. As you create invoices, Table 12 aggregates in real-time with mathematically precise rounding, ready for immediate 1-click export into the official GSTN Offline JSON tool.