Items, HSN and SAC codes, and GST rates
Before you can bill, the software needs a list of what you sell: each item with its code, unit and GST rate. Get the code right once and every invoice, return and report uses it.
HSN for goods, SAC for services
HSN (Harmonized System of Nomenclature) codes classify goods; the first two digits are the chapter, for example 84 for machinery and fans. SAC (Services Accounting Code) codes classify services and all start with 99, for example 9987 for maintenance, repair and installation services. Look up any code and its rate in the free HSN code finder.
How many digits the invoice must show
- Turnover up to Rs 5 crore in the previous year: at least 4 digits on invoices to registered buyers (B2B).
- Turnover above Rs 5 crore: at least 6 digits on every invoice.
[Notification 78/2020-Central Tax, in force from 1 Apr 2021]
GST rates from 22 Sept 2025
The GST Council's 56th meeting (3 Sept 2025) moved most goods to two main rates, 5% and 18%, with 40% for a short list of specified goods; a few items stay at 0%, 0.25% or 3% [GST Council, 56th meeting, rates in force from 22 Sept 2025]. Rates are fixed per code, so always take the rate from the code, not from memory.
Units
Each item has a unit of quantity such as NOS (numbers), KGS, MTR or LTR. Returns report quantities by these units, so pick the one you actually sell in.
Practice task
Questions
Can I use a 4-digit HSN code?
Yes, if your turnover was up to Rs 5 crore in the previous year (B2B invoices need at least 4 digits). Above Rs 5 crore, use at least 6 digits [Notification 78/2020-Central Tax].
Where do I find the GST rate for a code?
In the rate notifications of the GST Council. The Rebota HSN code finder lists codes from the GSTN master with their rates.
Reviewed: 7 Nov 2026. This is general information, not advice from a chartered accountant. Rates and rules change; check the source named in brackets.